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AstraZeneca sold its stake in Moderna for more than $1 billion as it looks to develop its own pipeline of drugs.

AstraZeneca AZN, +0.50% has sold its entire 7.7% stake in U.S. biotech company Moderna for more than $1 billion.

The cash from the the sale of AstraZeneca’s holding will help shore up the Anglo-Swedish drug maker’s finances, as it develops its own pipeline of drugs and aims to complete its $39 billion takeover of Boston-based Alexion Pharmaceuticals ALXN. That deal will expand its foothold in the lucrative field of rare-diseases drugs and boost sales of drugs in new markets, particularly China. 

“During 2020, AstraZeneca sold a proportion of its equity portfolio receiving consideration of $1.3 billion, a large proportion of which related to the disposal of its full holding in Moderna,” AstraZeneca said in its 2020 annual report.

Shares in the Cambridge, Mass.-based Moderna MRNA, which listed on Nasdaq in 2018, soared more than five times in value in 2020 after the U.S. biotech started development of its two-shot COVID-19 vaccine, which has been authorized for emergency use in the U.S., the European Union and the U.K., among other countries.

Read: Here’s How AstraZeneca Says Covid-19 Could Accelerate Cancer Clinical Trials

Last week, Moderna 0A45, +0.85% said it was expecting sales of $18.4 billion from its COVID-19 vaccine this year — higher than its U.S. rival Pfizer PFE, +0.96% which has forecast revenues of $15 billion from its share of sales from the vaccine it developed with partner BioNTech.

Read: Moderna reports $570 million in revenue for first time driven by sales of COVID-19 vaccine

Moderna MRNA, -5.60% plans to produce at least 700 million doses of its vaccine in 2021, up from a previous low-end range estimate of 600 million, with a new goal of making 1.4 billion doses in 2022.

The company’s stock, which is up more than 48% so far this year, was up 2.45% in premarket trading in New York on Monday.

The sale of its Moderna stake comes eight years after AstraZeneca Chief Executive Pascal Soriot made a $240 million investment in Moderna to gain access to the startup’s know-how in manipulating RNA, or ribonucleic acid, which helps create proteins inside cells.

Read: AstraZeneca made a bet on Moderna back in 2013. Here’s what it’s worth now

Under the terms of that agreement, AstraZeneca AZN, +0.50% won the exclusive rights for five years to choose as many as 40 drugs for development. On top of the initial $240 million, Moderna was also entitled to $180 million for achieving certain technical milestones, and to payments as well as royalties on drugs developed by AstraZeneca. At the time, it was one of the largest-ever initial payments in a pharmaceutical industry licensing deal that didn’t involve a drug already being tested in clinical trials.

AstraZeneca 0A4J, -1.99% will retain the partnership with Moderna on other disease treatments and is currently progressing 19 projects across cardiovascular, renal and metabolism, as well as oncology, with the U.S. biotech.

Read: AstraZeneca profit, revenue up, guides for growth

Shares in AstraZeneca, which have fallen by almost 4.8% so far this year, were flat in London trading on Monday.

Last week, AstraZeneca said that it is still aiming to supply 180 million doses of its COVID-19 vaccine, developed with the University of Oxford, to the EU in the second quarter of the year, as the 27-member bloc continues to grapple with supply issues.

The sale of AstraZeneca’s stake in Moderna was first reported by The Times.

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