Another Drug Company Gets Dealt

AstraZeneca is buying Alexion Pharmaceuticals for $39 billion in cash and stock, or $175 a share, in one of the biggest drug mergers of 2020.

Alexion [$ALXN] shareholders will get “$60 in cash plus 2.1243 AstraZeneca [$AZN] American depositary receipts for each share they own”, according to a joint statement put out Saturday morning. The boards of both AstraZeneca and Alexion have rubber-stamped the deal, which is slated to wrap up in Q3 of 2021. Alexion will retain 15% of the combined company.

Based in Cambridge, U.K, AstraZeneca is on the home stretch in developing a vaccine with the University of Oxford, which is being reviewed by U.K. and European medicine regulators. AstraZeneca said Alexion’s proficiency in complement biology will spark its growing presence in immunology. AstraZeneca also plans to make Boston– where Alexion is based–its headquarters for rare diseases. [Peter Thiel’s New IPO & Its Not Palantir]

Assuming positive results from that trial, the company should be able to submit the vaccine to U.S. regulators within the next six weeks” — AstraZeneca CEO Pascal Soriot

“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. We look forward to welcoming our new colleagues at Alexion so that we can together build on our combined expertise in immunology and precision medicines to drive innovation that delivers life-changing medicines for more patients,” — AstraZeneca CEO Pascal Soriot

The deal comes months after AbbVie [$ABBV] closed its $463 billion purchase of Botox maker, Allergen [$ALGN], in May, based on the closing price of AbbVie’s common stock of $78.45. This year has been a busy one for AstraZeneca, agreeing in September to buy Dogma Therapeutics for its preclinical oral PCSK9 inhibitor, which lowers cholesterol.

“It’s a tremendous opportunity for us to accelerate our development in immunology, getting into a new segment of disease, a new segment of physicians, and patients we haven’t been able to cover so far,” — Soriot

Alexion is known for its development of rare disease drugs Ultomiris and Soliris, which together accounted for $4.3 billion of Alexion’s $5 billion in product sales in 2019. Alexion’s best-seller is Soliris, which is used against a range of rare immune-disorders including paroxysmal nocturnal hemoglobinuria (PNH), which causes anaemia and blood clots, and whose revenue rose 3.6% in the first nine months to $3 billion.

Alexion has been on a nonstop shopping spree since 2018, gobbling up four smaller drugmakers for a total of $4 billion. Its most recent deal, a $1.4 purchase of Portola Pharmaceuticals, was finalized in July. The deal was spurned and pushed Alexion shares down 5.4% as a result in May. It also prompted activist investor Elliott Management to call for Alexion to put itself up for sale, purporting the company was going in the wrong direction. Alexion shares have bounced back since touching a low of $82.36 in March, and closed Friday at $120.98, up 1.8%. AstraZeneca shares closed Friday up 0.7%, at $54.27.

“This transaction marks the start of an exciting new chapter for Alexion,” said Alexion CEO Ludwig Hantson, Ph.D., in a statement. “We bring to AstraZeneca a strong portfolio, innovative rare disease pipeline, a talented global workforce and strong manufacturing capabilities in biologics.” [Hey Pfizer, Moderna said “Hold My Beer”]

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