AstraZeneca, one of the vaccine companies spearheading the fight against the ongoing global health crisis, underscored where its growth will be sourced from following the pandemic, with a $39 billion agreement to buy rare-disease group Alexion Pharmaceuticals.
The British-Swedish drugmaker's acquisition of Alexion will be its biggest ever, as it diversifies away from its rapidly-rising cancer business in a bet on immunology treatments.
Members of the board of the two companies said they unanimously approved the deal. It is estimated to be finalized in the third quarter of 2021. Shareholders of Alexion will get around 15% of the new entity. The shareholders will be given $60 in cash and 2.1243 AstraZeneca American Depositary Shares (ADS) for each Alexion share or around $175 per share.
AstraZeneca has teamed up with the University of Oxford to make a COVID vaccine. It is in the advanced phase of development and is awaiting approval from British and European governments.
The acquisition is a major step in AstraZeneca's history, Chief Executive Officer Pascal Soriot said during a call with members of the media. "It is a tremendous opportunity for the company to fast-track our development of immunological," Bloomberg News quoted the CEO as saying.
The procurement comes in a week that AstraZeneca said it was conducting further studies to validate whether its COVID treatment could be 90% effective, potentially delaying its launch and as a rival vaccine from Pfizer and BioNTech was rolled out in Britain and granted authorization for emergency use in the U.S.
Elliott Management Corp., billionaire Paul Singer's activist investor hedge fund, has been pushing Alexion to sell this year, criticizing the group's earlier buyout of San Francisco-headquartered Portola.
AstraZeneca agreed to pay for the acquisition deal with a combination of stock and cash and said it approved a short-term loan of $18 billion from J.P. Morgan, Goldman Sachs, and Morgan Stanley to help pay for it.
The offer gives Alexion a value of $175 per share -- a 45% premium to its Friday's closing price. It's the most important deal for AstraZeneca since it was established in a 1999 merger of Swedish and British companies. The deal with Alexion would bolster its position among the top 10 biggest vaccine manufacturers in the globe.
Alexion's top-selling drug is Soliris, administered on a host of rare immune-diseases, including paroxysmal nocturnal hemoglobinuria (PNH), which causes blood clots, and whose sales climbed 3.7 percent in the first three quarters to around $3 billion.
