Proposed transfer of assets to and termination of agreement with AstraZeneca for consideration to be set off against debt and accrued interest
Circassia Pharmaceuticals plc, (“Circassia” or “the Company”; LSE: CIR) announces that the Board has concluded that it is in the best interests of the Company to terminate the development and commercialisation agreement between the Company and AstraZeneca UK Limited, a subsidiary of AstraZeneca plc (LSE/STO/NYSE: AZN) (AstraZeneca) for the U.S. commercial rights to Tudorza® and Duaklir® and transfer the assets to AstraZeneca (the Transaction).
On completion of the Transaction, AstraZeneca will acquire the U.S. commercial rights to Tudorza® and Duaklir® together with certain ancillary rights and assets, from Circassia the consideration for which shall be equal to, and shall be satisfied by way of set-off against, the entirety of the loan amount outstanding from the Company to AstraZeneca, together with accrued interest owed by the Company to AstraZeneca, as at the date of completion of the Transaction (being approximately US$149.9 million as at the date of announcement) AstraZeneca will retain its 18.9% shareholding in the Company. Subject to receipt of necessary approvals, it is anticipated that the Transaction will complete in no longer than three months.
The proposed Transaction will constitute a fundamental change of business of Circassia under Rule 15 of the AIM Rules for Companies and is therefore conditional on, inter alia, the passing of an ordinary resolution to approve the Transaction at the General Meeting, a circular convening the General Meeting is expected to be posted to Shareholders shortly. In addition, the Transaction is considered to constitute a related party transaction under Rule 13 of the AIM Rules for Companies.
On completion of the Transaction, Circassia proposes to change its name to Circassia Group plc, subject to the passing of a special resolution to approve the Company’s change of name at the General Meeting.
Ian Johnson, Circassia’s Executive Chairman, said: “As a Board and Management team, we conducted a strategic review of our business and its prospects, concluding that it would be in the best interests of both patients and our shareholders for us to terminate the development and commercialisation agreement between the Company and AstraZeneca UK Limited for the U.S. commercial rights to Tudorza® and Duaklir®.
As we look to move forwards with a primary focus on our Niox® respiratory diagnostic platform, we are confident in our ability to drive long-term growth. Upon completion, this transaction will transform Circassia into a debt-free business with a strong revenue-generating business, with which we have the potential to expand into new territories and a commercial infrastructure that can in the medium term be further leveraged through broadening its range of products. This fundamental change in the business will place us in a strong position to deliver improved shareholder value.”
The person responsible for releasing this announcement on behalf of Circassia Pharmaceuticals Plc is Michael Roller, Chief Financial Officer.
About Circassia
Circassia is a world-class specialty pharmaceutical business focused on respiratory disease. The Company sells its market-leading NIOX® asthma management products directly to specialists in the United States, United Kingdom, China, Germany and Italy, and in a wide range of other countries through its network of partners. In the United States, Circassia has the commercial rights to chronic obstructive pulmonary disease (COPD) treatments Tudorza® and Duaklir®. Circassia also has the US and Chinese commercial rights to the late-stage ventilator-compatible nitric oxide product LungFit PH.