After the big disaster with its cat allergy vaccine, Circassia closes a €214M deal to acquire rights from two AstraZeneca products for pulmonary disease.
Circassia could not beat the placebo in a Phase III trial for cat allergy last year, which immediately drove its stock down by 65% and led to the halt of clinical trials across its allergy pipeline. Today, its shares are back up by 30% after the announcement of a deal between the British biotech and AstraZeneca.
The British biotech is offering AstraZeneca up to €214M ($230M) plus royalties for certain US commercial rights to Tudorza and Duaklir, two inhalation products for chronic obstructive pulmonary disease (COPD). The deal includes shares from Circassia with a value of €47M ($50M).
Tudorza is already on the market and brought AstraZeneca €158M ($170M) last year, while Duaklir is approved in Europe and completing Phase III in the US. Both drugs seem well positioned to bring revenues, which could definitely help Circassia get back on track after the hard blow from last year.
Circassia raised an impressive £200M (€230) when it entered the London Stock Exchange. The catastrophe of its cat allergy trial has definitely made the company fall short of expectations. Notably, the biotech investor star Neil Woodford had a 19% stake in the company when the results of the failed trial were announced.
It seems like the company is fighting to get back to its previous days of success, and acquiring rights on drugs with an advanced stage of development from a big pharma seems like a safe option to start. However, this move doesn’t bring any innovation, which is certainly not the track investors were originally expecting the company to take. Let’s see if Circassia can use the revenues to boost its own pipeline in coming months.
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