LONDON (ShareCast) - (ShareCast News) - Shares in Circassia shot higher after AstraZeneca decided to enter its shareholder register as part of a deal for the rights to two of its products.
The two companies penned a collaboration agreeement giving Oxford-based Circassia "certain" commercial rights in the US to Astra's Tudorza and Duaklir products for chronic pulmonary disease.

Specifically, the biotech group backed by Neil Woodford would enter into a commercial collaboration and profit sharing agreement for Tudorza in the US, and pay royalties for sales of Duaklir once it obtained regulatory approval.

Those products would transform its portfolio and commercial presence, Circassia said in a statement, giving its commercial infrastructure in the US a stronger foothold and placing it on solid footing for future product acquisitions and in-licensing opportunities.

In exchange, Circassia agreed to pay a maximum total consideration of $230m, including $50m-worth of its own shares upon completion of the transaction.

The former included a $100.0m deferred non-contingent consideration payable on the earlier of 30 June 2019 or upon FDA apprval for Duaklir.

Circassia also acquired an $80.0m option to purchase all the commercial rights and economic benefits of Tudorza in the inhaled administration for all respiratory indications in the US. The exact cost of the option would depend on the level of sales of Tudorza in the US.

Management also agreed to contribute up to $62.5m in research and development, payable as deferred payments to Astra, to be funded from its profit sharing agreement with Astra.

Tudorza generated $170m in global revenues for AstraZeneca last year, with $80.0m of that originating from the States.

Duaklir was in phase III trials - as the phase of clinical testing on humans is termed - in the US for the treatment of chronic obstructive pulmonary disease. It had already been approved in the European Union and roughly 50 countries around the world.

As of 0943 GMT shares in Circassia were rocketing 24.93% to 109.0p, giving the firm a market capitalisation of £310.53m.

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