AstraZeneca said today it will partner with Circassia Pharmaceuticals on U.S. marketing and/or development of two of its inhaled drugs for chronic obstructive pulmonary disease (COPD).

The two drugs are Tudorza® Pressair® (aclidinium bromide inhalation powder), which has been sold Stateside since 2012, and Duaklir®, which is sold in Europe and on track to seek FDA approval next year.

The deal could generate up to about $300 million for AstraZeneca, and is the latest instance of the pharma giant outlicensing its products to partners in order to generate cash.

AstraZeneca gained rights to Tudorza in 2015 when it acquired the branded respiratory drug business of Actavis (now Allergan) in the U.S. and Canada for $600 million-plus.

Circassia has agreed to lead the promotion of Tudorza in the U.S. and has an option to gain full U.S. commercial rights in the future from AstraZeneca under the transaction—along the lines of U.S. rights that Circassia has gained to Duaklir under the agreement.

The deal gives a minority equity stake in Circassia to AstraZeneca, which has agreed to complete ongoing development activities, as well as continue to manufacture and supply both medicines.

Mark Mallon, evp, global product & portfolio strategy at AstraZeneca, said in a statement that the agreement will enable his company to refocus its respiratory drug business on other products, including marketed drugs Symbicort® (budesonide/formoterol fumarate dihydrate) and Bevespi Aerosphere® (glycopyrrolate /formoterol fumarate), as well as benralizumab and other respiratory development programs.

The companies also cited Circassia’s desire to strengthen its respiratory presence in the U.S., which they said could allow for an expanded collaboration in the future.

“As part of the long-term strategic collaboration with AstraZeneca, we will immediately double our U.S. sales force to promote Tudorza as our priority, as well as our existing NIOX® products, transforming Circassia into a world-class respiratory business,” added Circassia CEO Steve Harris.

Circassia has agreed to pay AstraZeneca $50 million worth of its ordinary shares, based on either the weighted average share price of Circassia over the period 20 days—either prior to signing or prior to closing (subject to a maximum number of shares), whichever is lower.

Circassia also agreed to pay AstraZeneca $100 million upon either approval of Duaklir in the U.S. or June 30, 2019, whichever comes first. Circassia will also pay up to an additional $80 million should it exercise its option to sublicense commercial rights to Tudorza in the U.S.

The two companies said they will share U.S. profits from Tudorza equally, with AstraZeneca continuing to book U.S. product sales of Tudorza until Circassia exercises its option. If that happens, Circassia will pay AstraZeneca tiered percentage royalties on potential future US sales of Duaklir.

In addition, Circassia will contribute up to $62.5 million toward development of the medicines.

AstraZeneca said income from the drugs will be reported as externalization revenue since it will retain a significant ongoing interest in Tudorza and Duaklir. That income includes an expected $60 million at closing, plus any potential future royalties, deferred income, and any future payment for the option to gain U.S. commercial rights to Tudorza. Any potential future supply of the medicines to Circassia will be reported as product sales.

The agreement is expected to be completed in the second quarter, subject to approval by Circassia shareholders and customary closing conditions.

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