AstraZeneca Moves into Rare Disease with $39 Billion Acquisition of Alexion
December 14, 2020
Rare Daily Staff
AstraZeneca is making a strong push into rare disease with the acquisition of Alexion Pharmaceuticals in a cash and stock deal valued at $39 billion, the biggest deal of 2020.
Alexion shareholders will receive $60 in cash and 2.1 AstraZeneca American Depositary Shares (each ADS representing one-half of one ordinary AstraZeneca share) for each Alexion share, valuing the deal at $175 per share, a 43 percent premium to its closing price ahead of the announcement.
The boards of directors of both companies have unanimously approved the acquisition, which is expected to close in the third quarter of 2021, subject to receipt of regulatory clearances and approval by shareholders of both companies. Upon completion, Alexion shareholders will own about 15 percent of the combined company.
“Alexion has established itself as a leader in complement biology, bringing life-changing benefits to patients with rare diseases. This acquisition allows us to enhance our presence in immunology,” said Pascal Soriot, CEO of AstraZeneca.
Shares of AstraZeneca dropped 5.5 percent on the news.
Alexion has pioneered complement inhibition for a broad spectrum of immune-mediated rare diseases caused by uncontrolled activation of the complement system, a vital part of the immune system. Alexion’s franchise includes Soliris (eculizumab), 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. More recently, Alexion launched Ultomiris (ravulizumab), a second-generation C5 monoclonal antibody with a more convenient dosing regimen.
Alexion’s immunology expertise extends to other targets in the complement cascade beyond C5 as well as additional modalities, with a deep pipeline including Factor D small-molecule inhibitors of the alternative pathway of the complement system, an antibody blocking neonatal Fc receptor (FcRn)-mediated recycling, and a bi-specific mini-body targeting C5, among others. The FcRn extends the half-life and hence the availability of pathogenic immunoglobulin G (IgG) antibodies.
“For nearly 30 years Alexion has worked to develop and deliver transformative medicines to patients around the world with rare and devastating diseases,” said Ludwig Hantson, CEO of Alexion. “This transaction marks the start of an exciting new chapter for Alexion.”
Alexion’s rare disease franchise is commercially successful, even as the company has stumbled recently as a lack of faith in management has led activist investors to push for a sale of the company.
AstraZeneca says the two companies have been on converging paths, with AstraZeneca expanding its presence from primary to specialty care, and Alexion progressing from ultra-orphan to orphan and specialty conditions.
AstraZeneca says the deal will accelerate its growing focus in immunology. The complement cascade is pivotal to the innate immune system, playing a crucial role in many inflammatory and autoimmune diseases across multiple therapy areas, including hematology, nephrology, neurology, metabolic disorders, cardiology, ophthalmology and acute care. In contrast, AstraZeneca’s capabilities in genomics, precision medicine and oligonucleotides can be leveraged to develop medicines targeting less-frequent diseases. Combining AstraZeneca’s capabilities in precision medicine and Alexion’s expertise in rare disease drug development and commercialization will enable the new company to develop a portfolio of medicines addressing the large unmet needs of patients suffering from rare diseases.
Boston will be the headquarters for rare diseases, and the companies will work together to build on Alexion’s pipeline of 11 molecules across more than 20 clinical-development programs across a spectrum of rare disease indications, and beyond.
Members of Alexion’s current senior management team will lead future rare disease activities. AstraZeneca has also agreed to provide Alexion employees the same level of salary and benefits for 12 months following the closing of the deal.
The combined company is expected to deliver double-digit average annual revenue growth through 2025.
Photo: Ludwig Hantson, CEO of Alexion
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