Circassia Pharma (AIM:CIR) will hand over the US commercial rights to two respiratory drugs back to AstraZeneca (LON:AZN) to focus on respiratory diagnostics.
AstraZeneca will acquire the commercial rights to drugs Tudorza® and Duaklir® and waive loans and interest of US$149 million upon receiving both.
The AIM-listed pharmaceutical business focused on respiratory disease told investors that AstraZeneca will retain its 18.9% stake in the company as part of the original deal.
Circassia said it had carried out a strategic review of the business and two drugs and concluded that it was ‘highly unlikely’ that it would be able to refinance the loan from Astra.
Shares in Circassia were trading 29.43% higher at 22.65p during Thursday morning.
The group highlighted that its primary focus going ahead would be its Niox® respiratory diagnostic platform which it believes has the ability to drive long-term growth.
“Upon completion, this transaction will transform Circassia into a debt-free business with a strong revenue-generating business,” said Ian Johnson, Circassia's Executive Chairman.
Johnson said this would entail expanding into new territories and a commercial infrastructure that can, in the medium term, be “further leveraged through broadening its range of products.”
He added, “This fundamental change in the business will place us in a strong position to deliver improved shareholder value."
As the group marks a change of direction, Circassia said it would drop the ‘Pharma’ part of its name and will instead be known as Circassia Group going forward.
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