Pfizer has entered into an agreement with AstraZeneca for over-the-counter (OTC) rights to its stomach acid drug Nexium.
The US drug giant has agreed to make an upfront payment of £250 million to AZ for exclusive global rights to market Nexium (esomeprazole) for any approved OTC indications.
AZ, which will retain the prescription rights to the drug, also stands to receive milestone and royalty payments based on product launches and sales.
A marketing application for OTC Nexium 20mg was filed with European regulators in June this year, while a US filing for OTC Nexium 20mg delayed release capsules is expected in first half of 2013.
If the applications are successful, then Pfizer said it hopes to start selling the product in the US from 2014, with launches elsewhere thereafter.
"By working with AstraZeneca to offer upon regulatory approval an over-the-counter version of Nexium – a brand people know and trust – we are taking another crucial step to empower consumers by providing convenient access to important healthcare products,” said Pfizer Consumer Healthcare president Paul Sturman, explaining the firm's interest in the deal.
On the other side of the coin, the agreement will "help AstraZeneca realize the substantial, long-term value of this brand and potentially other brands in our portfolio," added Tony Zook, executive vice president of AZ's Global Commercial Organisation.
The companies have also taken things a step further by agreeing to explore the potential for a strategic partnership under which there could be similar agreements for other AZ prescription that may be suitable for OTC versions.
Pfizer now holds a right of first refusal regarding OTC rights for the local ant-inflammatory Rhinocort Aqua, a pump spray containing budesonide, for the treatment of non-infectious rhinitis.
On the back of the deal, Pfizer has increased its previous 2012 adjusted R&D expense guidance range from $6.5 billion - $7.0 billion to $6.75 billion - $7.25 billion, and dipped its previous 2012 adjusted diluted EPS guidance range from $2.14 - $2.24 to $2.12 - $2.22.
AstraZeneca said it will recognise the upfront of $250 million as other income for this year, which will boost core earnings per share for 2012 by around $0.16, leaving the core EPS target in the range $6.00 to $6.30.