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Rare Disease

AstraZeneca to buy rare disease specialist Alexion for $39 billion

Planned purchase highlights the appeal of rare disease treatments to drug companies

by Asher Mullard, special to C&EN
December 15, 2020 | A version of this story appeared in Volume 98, Issue 48

In a bid to expand into rare diseases, AstraZeneca is set to buy Alexion Pharmaceuticals for $39 billion. If the deal goes through, it will be AstraZeneca’s largest acquisition ever and the biggest pharmaceutical deal of the year to date.

Rare disease by the numbers


Rare diseases are known to exist today


Of rare diseases have approved treatments

30 million

People in the US are affected by rare disease


Of rare disease patients in the US are children

Source: Alexion


The planned purchase highlights continued interest in rare diseases. These diseases appeal to drug developers in part because clinical trials tend to be shorter and cheaper than they are for more common conditions. Companies then make up for low sales volumes for the resulting drugs by charging high prices.

Alexion, a Boston-based biotech firm that launched in 1992, helped validate this business model. The US Food and Drug Administration approved Alexion’s antibody therapy eculizumab (Soliris) in 2007, for a rare and life-threatening blood disorder called paroxysmal nocturnal hemoglobinuria. The agency has since approved the antibody, which binds the complement protein C5, for another rare disease as well. With a price tag of over $500,000 per year, eculizumab is one of the world’s most expensive drugs. In 2019, sales of eculizumab reached nearly $4 billion.

Alexion sells 4 other FDA-approved drugs and has 11 experimental candidates—spanning therapeutic modalities—in development.

The purchase “ticks all the boxes,” SVB Leerink stock analyst Andrew Berens writes in a note to clients. “In our view, this acquisition makes sense for [AstraZeneca] on a number of levels, including strategic and financial, as well as from an investment thesis perspective.” Alexion’s product portfolio complements AstraZeneca’s core businesses, he says, and AstraZeneca will be able to leverage its global sales force to market the acquired drugs in new markets.

Alexion’s therapies will add almost $6 billion to AstraZeneca’s roughly $26 billion in annual sales. The biotech firm’s products could bring in as much as $9 billion by 2024, analysts forecast.

Elliot Advisors, a hedge fund that invests in Alexion, has been pushing Alexion’s management since 2019 to sell the company. In May, Elliot cautioned that concerns about upcoming competition to eculizumab—including biosimilar versions of the antibody—were depressing Alexion’s valuation.

The proposed deal values Alexion at a premium of 45% above its prior share price. AstraZeneca expects the acquisition to close in the third quarter of 2021, subject to shareholder approval and other regulatory clearances.

AstraZeneca’s share price dropped 6% after it announced the deal. The decline continues a battering the company’s shares have taken in the past month as its once–front-runner COVID-19 vaccine program has fallen behind in the clinic.

The pharmaceutical industry has had a busy year of mergers and acquisitions, despite the disruption caused by COVID-19. Other big-ticket deals include Gilead Sciences’ $21 billion acquisition of antibody-drug conjugate company Immunomedics and Bristol Myers Squibb’s $13 billion acquisition of the cardiovascular drug specialist MyoKardia.



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