AstraZeneca To Buy Ardea

AstraZeneca has struck a deal to buy the small-molecule drug company Ardea Biosciences for $1.26 billion. San Diego-based Ardea has three compounds in development: two that target gout and one in the oncology area.

Ardea’s most advanced candidate, lesinurad, is a selective inhibitor of URAT1, a transporter in kidney cells that regulates uric acid excretion from the body. Chronic hyperuricemia, or abnormally elevated uric acid levels in the blood, is a symptom of gout, a debilitating and progressive disease that affects the connective tissue in joints.

Lesinurad is currently in Phase III clinical trials, and Ardea anticipates filing for regulatory approval in the U.S. and Europe in 2014. AstraZeneca plans to develop the drug for China and Japan as well. From the transaction, the British firm will also gain a next-generation URAT1 inhibitor, RDEA3170, which is in Phase I development. Ardea licensed its oncology candidate to Bayer HealthCare in 2009.

According to Ardea, about 15 million people in the world’s major markets were diagnosed with gout in 2009. Treatment options are limited, however; FDA has approved only two new hyperuricemia medications in the past 40 years, Ardea says.

The prospects for addressing this unmet need are attractive enough that in April, Japan’s Takeda Pharmaceutical agreed to pay at least $800 million for Philadelphia-based URL Pharma. Specializing in gout therapies, URL had about $600 million in sales in 2011, with more than $430 million of the total from its gout drug Colcrys. Takeda sells the uric acid-lowering drug Uloric.

In its pursuit of the gout market, AstraZeneca will pay a 50% premium over Ardea’s recent stock market value. Although Ardea has no product sales, it does have about $250 million in cash, much of which it amassed in February from a $158 million stock offering.

The deal is “a good use of cash for AstraZeneca and an attractive fit for AstraZeneca’s global primary care business,” Leerink Swann stock analyst Seamus Fernandez told clients in a recent note. His opinion is founded on positive Phase III results and the view that lesinurad is considered the most attractive among drugs in late-stage development for treating gout.