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Home Industry News AstraZeneca to face rival pay out

AstraZeneca to face rival pay out

13th March 2006

AstraZeneca will have to pay drug company rival MSD about $4.5 billion in two years time, according to reports.

The information, reported by the Sunday Times, apparently stems from analyst comments regarding the unwinding of a 1998 agreement concerning the payment of royalties.

According to the newspaper, MSD should receive royalties from the sale of some of AstraZeneca’s top selling brands, such as Nexium.

The agreement also includes the proviso that in 2008, AstraZeneca will effectively buy-out the MSD rights to royalties, with the Sunday Times saying any price is dependent on how well the drugs sell in the years 2005-07.

Citing such analysts such as Graham Parry of Merril Lynch, the Sunday Times said that the actual amount could reach around $4.7 billion if MSD exercises an option that means AstraZeneca will have to buy out MSD options on certain other drugs in the AstraZeneca portfolio.

track© Adfero Ltd

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