AstraZeneca and Aspen enter agreement for remaining rights to anaesthetics medicines

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AstraZeneca has announced that it has entered into an agreement with Aspen Global Incorporated (AGI), part of the Aspen Group, under which AGI will now acquire the residual rights to the established anaesthetic medicines comprising of Diprivan, EMLA, Xylocaine/Xylocard/Xyloproct, Marcaine, Naropin, Carbocaine and Citanest.

AstraZeneca entered into an agreement with AGI in June 2016, under which AGI gained the exclusive commercialisation rights to the medicines in markets outside the US. Under the terms of the new agreement, AGI will now acquire the remaining rights to the intellectual property and manufacturing know-how related to the anaesthetic medicines for an upfront consideration of $555 million. Additionally, AGI will pay AstraZeneca up to $211 million in performance-related milestones based on sales and gross margin during the period from 1 September 2017 to 30 November 2019. AstraZeneca will continue to manufacture and supply the medicines to AGI during a transition period of up to five years.

Mark Mallon, Executive Vice President, Global Product and Portfolio Strategy, AstraZeneca said: “AstraZeneca, AGI and patients have all benefitted from the successful commercial agreement we established last year. As our relationship has evolved, AGI has shown that it is in a strong position to maximise the value and reach of the anaesthetic medicines through its extensive commercial network. Disposing the remaining rights to the medicines allows both companies to benefit from greater efficiencies as AstraZeneca continues to focus our resources on our three main therapy areas.”

Stephen Saad, Group Chief Executive, Aspen, said: “This second transaction allows AGI to reap the additional benefits from the excellent strategic acquisition that the anaesthetics portfolio has proven to be for Aspen and a key part of this will be to continue leveraging the strong working relationship that AGI has developed with AstraZeneca.”

Under the terms of the original agreement, entered into in June 2016, AGI made an upfront payment to AstraZeneca of $520 million and agreed to make future Product Sales-related payments of up to $250 million (see first payment below), as well as paying double-digit percentage royalties on Product Sales. AstraZeneca agreed to continue to manufacture and supply the medicines to AGI on a cost-plus basis for an initial period of 10 years.

The new agreement does not impact the first Product Sales-related payment of $150 million due to AstraZeneca, for which the contingent terms have now been met. This income will be recorded as Externalisation Revenue in the Company’s financial statements in the third quarter of 2017.

Under the new agreement, AGI will no longer pay royalties to AstraZeneca. The remaining $100 million Product Sales-related payment from the original agreement will be made to AstraZeneca in 2018, if the contingent terms are met, and will be recorded as Other Operating Income to reflect the reduced ongoing interest in the medicines as a result of the new agreement.

Further, as AstraZeneca will transition the manufacture and supply of the medicines to AGI, and therefore will have a reduced ongoing interest, the $555 million upfront and up to $211 million sales and gross margin-related payments from the new agreement will also be recorded as Other Operating Income in the Company’s financial statements.

The new, additional agreement is expected to close in the fourth quarter of 2017, subject to customary closing conditions and regulatory clearances. It does not impact AstraZeneca’s financial guidance for 2017.

The Stars Group Raises Full Year 2017 Guidance; Announces Additional $75 Million Of Debt Prepayment

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The Stars Group Inc. (Nasdaq: TSG; TSX: TSGI) has updated its previously announced guidance ranges for the full year 2017 and announced the prepayment of an additional $75 million of second lien debt. All dollar ($) amounts are in U.S. dollars.

“It’s been a great three months since joining The Stars Group and the team is energized,” said Brian Kyle, Chief Financial Officer. “As I am now fully familiar with our forecasting and given our solid trends across all business lines, which reinforce our conviction and commitment to our strategy, it is now appropriate to update our financial guidance. In addition, given our progress to date, we are also able to make another meaningful prepayment of our debt.”

Based on year-to-date performance, The Stars Group has updated its previous full year 2017 guidance and now expects:

Revenues of between $1,285 and $1,315 million, as compared to the prior range of $1,200 and $1,260 million. The revised guidance implies 2017 revenue growth of between 11% and 14% compared to the prior year and includes an expectation that real-money online poker revenue will be slightly higher year-over-year as The Stars Group, among other things, continues to experience a very positive consumer response to Stars Rewards, which was rolled out globally in July;

Adjusted EBITDA of between $590 and $610 million, as compared to the prior range of $560 and $580 million. The revised guidance implies 2017 Adjusted EBITDA growth of between 13% and 16% compared to prior year;

Adjusted Net Earnings of between $445 and $469 million, as compared to the prior range of $413 and $437 million and as compared to approximately $367 million in 2016; and

Adjusted Net Earnings per Diluted Share of between $2.17 and $2.31, as compared to the previous range of between $2.01 and $2.15 and as compared to $1.88 in 2016.

These estimates reflect management’s view of current and future market and business conditions, including assumptions of (i) anticipated negative operating conditions in Poland primarily related to constraints on processing payments in that jurisdiction, the cessation of real-money online poker in Australia on September 11, 2017, and the cessation of real-money online gaming in Colombia on July 17, 2017, (ii) the introduction of Stars Rewards, The Stars Group’s previously disclosed cross-vertical customer loyalty program, (iii) no other material adverse regulatory events and (iv) no material foreign currency exchange rate fluctuations, particularly against the Euro which is the primary depositing currency of The Stars Group’s customers, that could impact customer purchasing power as it relates to The Stars Group’s U.S. dollar denominated product offerings. Such guidance is also now based on a Euro to U.S. dollar exchange rate of 1.18 to 1.00 and all other currencies at their average exchange rate for the month of August, in each case for the remainder of 2017, unaudited expected results and certain accounting assumptions.

The Stars Group will prepay without penalty an additional $75 million under its second lien term loan using cash on the balance sheet and cash flow from operations. Following this prepayment, The Stars Group will have repaid $115 million of its second lien debt thus far in 2017, resulting in a total reduction in annual interest expense of approximately $9.5 million, and reducing the principal balance of the second lien term loan to $95 million.

Agrium and PotashCorp Receive Unconditional Canadian Regulatory Clearance for Merger

agriculture

Potash Corporation of Saskatchewan Inc. (PotashCorp) (TSX: POT) (NYSE: POT) and Agrium Inc. (TSX: AGU) (NYSE: AGU) have announced that the Canadian Competition Bureau (“CCB”) has granted unconditional regulatory approval for the proposed merger of equals by issuing a no-action letter.

The CCB concluded that the proposed transaction is not likely to lead to a substantial lessening or prevention of competition with respect to potash fertilizer, phosphate fertilizers, and nitric acid. The CCB found that global prices of potash are correlated with prices in Canada and that customers can source potash from multiple suppliers. The issuance of the no-action letter satisfies the Canadian regulatory condition of closing of the proposed merger of equals transaction.

The companies previously received unconditional clearance for the merger in both Brazil and Russia. The regulatory review and approval process continues in the U.S., China, and India and the parties expect to close the transaction by the end of the fourth quarter of 2017.

Upon closing the merger transaction, the new company will be named Nutrien. As the largest global provider of crop inputs and services, Nutrien will play a critical role in “Feeding the Future” by helping growers to increase food production in a sustainable manner.

Additional information on the merger between Agrium and PotashCorp can be found at the following website http://www.worldclasscropinputsupplier.com/. Information about Agrium and PotashCorp can be found under their respective corporate profiles on SEDAR at www.sedar.com or on EDGAR at www.sec.gov, respective websites at www.agrium.com and www.potashcorp.com, or by contacting the representatives below.