AstraZeneca plc agreed to buy Pearl Therapeutics Inc., a closely held U.S. drugmaker, for as much as $1.15 billion to expand its portfolio of respiratory-disease treatments as competition for lung medicines increases.

The U.K. company will pay $560 million initially for Redwood City, Calif.-based Pearl Therapeutics, AstraZeneca said today in a statement. Payments related to development of Pearl Therapeutics’ products could add as much as $450 million to the price, and sales-related payments could add as much as $140 million, according to the statement.

It’s the second acquisition in two weeks by London-based AstraZeneca, which is looking to replenish the pipeline as its best-selling drugs face generic competition over the next three years. Pearl Therapeutics has a drug called PT003 for chronic obstructive pulmonary disorder in late-stage clinical trials, which would fit with AstraZeneca’s Symbicort portfolio, AstraZeneca Chief Executive Pascal Soriot said.

“Pearl’s novel formulation technology, together with its development products and specialist expertise, are a great complement to AstraZeneca’s long-established capabilities in respiratory disease, one of our core therapy areas,” Soriot said in the statement.

'Sensible’ Price

AstraZeneca said the Pearl Therapeutics purchase won’t change its 2013 forecast. The price is “sensible” and the deal structure “prudent,” Mark Purcell, an analyst with Barclays, wrote in a note to investors today.

AstraZeneca rose 0.9 percent to 3,332.50 pence at 10:10 a.m. in London, giving it a market value of 41.7 billion pounds ($64.7 billion). The stock has gained 19 percent this year, including reinvested dividends, compared with a 19 return in the Bloomberg Europe Pharmaceutical Index.

The market for dual bronchodilators, treatments that increase air flow to the lungs, may reach $8 billion in sales by 2021, yet Pearl Therapeutics’ product will probably be the fifth to be introduced, Alistair Campbell, an analyst with Berenberg Bank, said in a note to investors. Pearl has a triple- combination therapy in mid-stage trials that would be second to a GlaxoSmithKline Plc product, he said.

“This is a sensible deal to try to fix a recognized gap in the pipeline,” Campbell said. “AstraZeneca will be late to market and with no obvious differentiation, but there were few options left to the company.”

While PT003 will probably enter the market in 2016 behind competing drugs from London-based Glaxo and Novartis AG and is taken twice-daily rather than once daily, the inhaler is a “differentiating feature,” Andrew Whitney, an analyst with UBS, said in a note to investors today.

Soriot said he would pursue bolt-on acquisitions to bolster the pipeline rather than large purchases. The London-based company said May 28 that it would buy Omthera Pharmaceuticals Inc., which makes a cholesterol-lowering pill called Epanova, for as much as $443 million.

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