AstraZeneca announced to acquire Alexion Pharmaceuticals as the companies have entered into a definitive agreement. As per the agreement, Alexion’s shareholders will receive 2.1243 AstraZeneca American Depositary Shares (ADSs) and USD 60 in cash. The total consideration to Alexion shareholders would be USD 175 per share or USD 39 billion, based on AstraZeneca’s reference average ADR price of USD 54.14. The acquisition is anticipated to be completed by the third quarter of 2021, and Alexion’s shareholders will own 15% of the combined company.
This acquisition is aligned with AstraZeneca’s capital allocation priorities to focus and strengthen its presence in the field of immunology after growing steadily to develop technology for cardiovascular, oncology, renal, respiratory, and metabolic diseases. With AstraZeneca’s recent collaborations for the COVID-19 vaccine development in partnership with Oxford, it has enhanced its global networks, allowing Alexion’s portfolio specializing in rare diseases to penetrate more extensively address the unmet needs for patients with rare diseases. The acquisition will enable AstraZeneca to enter a whole new segment. It converges the patient-centric models of care delivery with strengths in immunology and other segments to drive future medicine innovation.
The past years have witnessed Alexion grow exponentially into a USD 5 billion company, expanding its ‘C5 franchise’ (C5 inhibitors) into the EU, Japan, Germany, and the US, transitioning about 70% of paroxysmal nocturnal hemoglobinuria (PNH) patient from Soliris to Ultomiris. Alexion recently also received FDA and EMA approval for a new formulation of ULTOMIRIS® Reduced Infusion Time. This year, Alexion also diversified its commercial portfolio by acquiring Portola Pharmaceuticals and Achillion Pharmaceuticals, adding Factor Xa inhibitor reversal agent and Factor D inhibitors to its growing pipeline.
This acquisition is well-timed as the global rare disease market is forecasted to grow by low double digits in the future. AstraZeneca’s expertise, combined with Alexion’s R&D team, will bolster the development of Alexion’s 11 molecules in the pipeline along with AstraZeneca’s 20 clinical drugs in various stages of clinical development. The combined company’s annual revenue is expected to reach a double-digit average by 2025 and enhance its core operating margin and profitability. The acquisition will also strengthen AstraZeneca’s cash-flow generation, which provides it with the flexibility to reinvest in R&D and lead to rapid debt reduction, increasing the dividend.