Ready or not, here comes Swedish Orphan Biovitrum AB (STO: SOBI). The company recently paid $1.5 billion to AstraZeneca (NYSE: AZN) in a double-sided deal. First, it’s acquiring the perpetual U.S. rights to Synagis (palivizumab), which prevents serious lower respiratory tract infections (LRTI) caused by FSV in high-risk infants.
The other side of the deal gives SOBI participation in 50% of the future earnings of AstraZeneca’s drug candidate MEDI8897, which it has been jointly developing with Sanofi Pasteur (NYSE: SNY) since March 2017.
MEDI8897 is a follow-on candidate to Synagis and a monoclonal antibody (mAb) being investigated for the prevention of LRTI caused by RSV.
Sobi will pay $1.5 billion upfront (SEK 13.6 B), consisting of $1 billion (SEK 9.1 B) cash and $500 million (SEK 4.5 B) in newly issued SOBI shares. It also could pay up to $470 million (SEK 4.3 B) for Synagis sales-related milestones from 2026 onwards.
This deal diversifies Sobi’s revenue based in specialty care-immunology and accelerates the build-up of its U.S. platform. Sobi expects to generate an EBITDA margin in excess of 60% and that the transaction will be accretive to earnings per share in 2019.