AstraZeneca to acquire Alexion Pharmaceuticals for £29.50 billion

AstraZeneca plc (LON: AZN) said on Saturday that it will buy Alexion Pharmaceuticals (NASDAQ: ALXN) for £29.50 billion. The acquisition marks the largest for the British pharmaceutical giant in history. As per AstraZeneca, bringing the U.S. drug manufacturer under its umbrella will help diversify its portfolio and expand its footprint in rare-disease and immunology drugs.

On the weekly chart, Alexion’s stock closed roughly 1% up on Friday. The Boston-based company is more than 10% up year to date in the stock market. At the time of writing, it has a market capitalisation of £20 billion and a price to earnings ratio of 28.33.

Alexion shareholders to get £86.95 of equity per share

Earlier this week, AstraZeneca said it was putting its COVID-19 vaccine through further trials to confirm if it could be 90% effective. In related news from the United States, Pfizer said that its COVID-19 vaccine that it developed in collaboration with Germany’s BioNTech received emergency use authorisation from the Food and Drug Administration (FDA).

CEO Pascal Soriot of AstraZeneca commented on the planned acquisition and said:

“It is a tremendous opportunity for us to accelerate our development in immunology, getting into a new segment of disease, a new segment of physicians, and patients we haven’t been able to cover so far.”

As per the agreement, Alexion shareholders will be entitled to £45.37 in cash. They will also get an equity per share of £86.95 either in the ordinary shares of AstraZeneca listed in the United Kingdom, or in American Depositary Shares (ADR). In a report published in November, AstraZeneca said its net profit jumped more than 100% in the fiscal third quarter.

AstraZeneca to launch an enhanced version of Soliris

Alexion’s Soliris is its best-selling drug that saw a 3.6% annualised growth in revenue to £2.27 billion in the first nine months. The drug is used to treat several rare immune-disorders like PNH (paroxysmal nocturnal hemoglobinuria).

Upon completion of the acquisition, AstraZeneca wants to launch Ultomiris (enhanced version of Soliris) that it says can capture a broader market. Both companies have already received approval from their respective boards, and the deal is now likely to close next year in the third quarter.

AstraZeneca shares are currently 6.5% up year to date in the stock market after a 30% recovery since its low in mid-March. At the time of writing, it is valued at £81 billion and has a price to earnings ratio of 57.04.