AstraZeneca to acquire Alexion for $39B
WILMINGTON – The pharmaceutical giant AstraZeneca announced Saturday that it has reached an agreement to acquire rare disease specialist Alexion Pharmaceuticals Inc. for $39 billion, the largest industry deal this year, according to officials.
The boards of directors of both Alexion and AstraZeneca have unanimously approved the deal and recommended that their respective shareholders vote in favor of it. Upon completion, two members of Alexion’s board will join AstraZeneca’s.
A combined rare diseases headquarters for AstraZeneca and Alexion’s staff will be located in Boston, officials said. Members of Alexion’s current senior management team will lead the future office.
Under the terms, shareholders of Alexion will receive a combination of cash and AstraZeneca stock totaling about $175 per share, or about a 45% premium on its closing value Friday. At $39 billion, the deal is about four times what Alexion was projected to make in revenue in 2025, according to recently submitted guidance. The acquisition is expected to close in the third quarter of 2021, with Alexion shareholders then owning about 15% 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, in a statement announcing the deal. “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.”
While AstraZeneca, whose global headquarters is in Britain but has its U.S. headquarters in suburban Wilmington, produces a variety of drugs for chronic diseases, like Symbicort, Crestor and Nexium, it also makes cancer treatment drugs like Tagrisso. The addition of Alexion will add expertise in immunological diseases, which are spurred by the uncontrolled activation of the immune system. It has a pipeline of 11 molecules addressing 20 rare diseases that AstraZeneca can build upon.
Rare diseases are a high-growth therapy area with rapid innovation and significant unmet medical need. Over 7,000 rare diseases are known today, and only about 5% have U.S. Food and Drug Administration-approved treatments.
Ludwig Hantson, CEO of Alexion who had been under pressure by activist investors to find a deal for the company, called the news “the start of an exciting new chapter for Alexion.”
“We bring to AstraZeneca a strong portfolio, innovative rare disease pipeline, a talented global workforce and strong manufacturing capabilities in biologics. We remain committed to continuing to serve the patients who rely on our medicines and firmly believe the combined organization will be well positioned to accelerate innovation and deliver enhanced value for our shareholders, patients and the rare disease communities,” he said in a statement.
To support the financing of the deal, AstraZeneca has obtained $17.5 billion in bridge financing from Morgan Stanley, J.P. Morgan Securities plc and Goldman Sachs. It is intended to cover the financing of the cash portion of the acquisition consideration and associated acquisition costs and to refinance the existing term loan and revolving credit facilities of Alexion.