AstraZeneca is selling to Pfizer rights to its late-stage small molecule antibiotics business in most markets globally outside the US, in a deal that could be worth near $1.6 billion.

The portfolio includes the approved antibiotics Merrem (meropenem), Zinforo (ceftaroline fosamil) and Zavicefta (ceftazidime-avibactam), as well as ATM-AVI and CXL, which are both in clinical development.

ATM-AVI is a bactericidal, injectable combination of aztreonam and a beta-lactamase inhibitor avibactam, in Phase II development for the treatment of life-threatening Gram-negative bacterial infections caused by multi-drug resistant (MDR) strains. 

CXL is a novel, injectable bactericidal beta-lactam/beta-lactamase inhibitor combination of ceftaroline fosamil (marketed as Zinforo in AZ markets), a next-generation cephalosporin with activity against multidrug-resistant Gram-positive and common enteric Gram-negative pathogens, and avibactam, which is on the brink of entering Phase III development.

Under the terms of the deal, Pfizer will make an upfront payment of $550 million to AZ on deal completion and a further unconditional payment of $175 million in January 2019 for the commercialisation and development rights to the late-stage antibiotics business in all markets where AZ holds rights.

Pfizer will also pay up to $250 million in commercial, manufacturing and regulatory milestones, up to $600 million in sales-related payments as well as recurring, double-digit royalties on future sales of Zavicefta and ATM-AVI in certain markets.

AZ says the move reinforces its focus on developing transformational medicines within its three main therapy areas, "while realising value from the strong portfolio of established and late-stage small molecule antibiotics through Pfizer's dedicated commercialisation and development capabilities in anti-infectives".

Explaining its own strategy behind the move, Pfizer's group president John Young said the firm is committed to looking for ways to enhance its portfolio of anti-invectives and anti-fungals around the world, and that the addition of AZ' complementary small molecule anti-infectives portfolio "will help expand patient access to these important medicines and enhance our global expertise and offerings in this increasingly important area of therapeutics, in addition to providing the opportunity for near-term revenue growth."