AstraZeneca Acquisition of Alexion Tops M&A in 2020

Rare disease M&A deal value at signing rose to $58.9 billion in 2020, up from $18.9 billion in 2019 thanks largely to AstraZeneca’s $39 billion acquisition of Alexion, a company focused on rare immune-mediated diseases. Alexion shareholders will receive $60 in cash and 2.1 Astrazeneca American Depository Shares for each Alexion share, which values Alexion at $175 per share, a 43 percent premium on its closing price ahead of the announcement of the deal. The acquisition provides AstraZeneca with a strong footing in rare diseases and enhances its position in immunology.

Alexion is a pioneer in developing therapies that inhibit the complement system, part of the immune system. The complement cascade is pivotal to the innate immune system. It plays a crucial role in many inflammatory and autoimmune diseases across multiple therapy areas, including hematology, nephrology, neurology, metabolic disorders, cardiology, ophthalmology and acute care. Activist shareholders had been pushing Alexion to explore a sale because of what they had termed “persistent underperformance.”

Alexion markets therapies that treat immune-mediated rare diseases caused by uncontrolled activation of the complement system, including Soliris, a first-in-class C5 monoclonal antibody for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH), atypical hemolytic uremic syndrome, generalized myasthenia gravis, and neuromyelitis optica spectrum disorder. The company also markets Ultomiris, a second-generation C5 monoclonal antibody with a more convenient dosing regimen. Alexion has a pipeline of 11 molecules across more than 20 clinical-development programs across the spectrum of indications, in rare diseases and beyond.

Johnson & Johnson’s acquisition of Momenta Pharmaceuticals, a developer of therapies for rare immune-mediated diseases for $6.5 billion was the second largest acquisition in the rare disease space in 2020. The deal will allow J&J’s Janssen Pharmaceutical to broaden its leadership in immune-mediated diseases and drive further growth through expansion into autoantibody-driven disease. The deal gives the company full global rights to the late-stage experimental therapy nipocalimab, a potential best-in-class drug in a new class of therapies. Nipocalimab is in development for warm autoimmune hemolytic anemia, myasthenia gravis, and hemolytic diseases of the fetus.

Bayer’s acquisition of the gene therapy developer Asklepios Biopharmaceuticals for $2 billion upfront and up to an additional $2 billion in milestone payments continued a move among the largest pharmaceutical companies to stake a claim in the emerging area of gene therapy. Asklepios, known as AskBio, has a pipeline of experimental preclinical and clinical stage candidates that includes treatments for rare neuromuscular, central nervous system, cardiovascular, and metabolic diseases. Lead programs include treatments for Pompe disease, Parkinson’s disease, and congestive heart failure. The company also has several active collaborations, including ones with Pfizer in Duchenne muscular dystrophy and with Takeda Pharmaceutical in hemophilia. The company provides Bayer with coveted gene therapy manufacturing capabilities, a robust pipeline of clinical programs, and a broad estate of more than 500 patents.

The deal follows M&A activity of several large biopharma companies in recent years to move into gene therapy. This includes the 2019 acquisitions by Roche of Spark Therapeutics for $4.3 billion, Astellas Pharma of Audentes Therapeutics for  $3 billion, Biogen of Nightstar Therapeutics for $800 million; and the 2018 acquisitions by Sanofi of Bioverativ for $11.6 billion, and Novartis of AveXis for $8.7 billion.

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