AstraZeneca's planned takeover of Alexion clears last regulatory review, deal to close next week
The final regulatory hurdle for AstraZeneca’s mega-merger with Alexion Pharmaceuticals has been cleared, paving the way for the deal to close as soon as next week.
Britain’s financial watchdog, The UK Competition & Markets Authority, has rubber stamped AstraZeneca’s $39 billion takeover of the Boston-based rare disease biotech, the companies announced Wednesday morning. As a result, the transaction is expected to close on July 21, with Alexion shares $ALXN being converted to AstraZeneca stock $AZN and removed from Nasdaq the next day.
Shares will also be admitted to the London Stock Exchange and Nasdaq Stockholm, the two markets of AstraZeneca’s home countries of the UK and Sweden. Once the merger is wrapped up, Alexion will essentially become AstraZeneca’s entire rare disease unit with blockbuster Soliris and follow-up drug Ultomiris coming on board.
“We are very pleased to have secured this critical final clearance,” AstraZeneca CFO Marc Dunoyer said in a statement. “We look forward to the imminent closing of the transaction so that we may pursue our shared ambition to bring more innovative medicines to patients worldwide and begin AstraZeneca’s next chapter of growth.”
While questions surrounded the merger back when it was announced in December 2020, CEO Pascal Soriot has outlined a vision for AstraZeneca to pave a new path in rare diseases for the first half of the next decade. With a particular focus on immunology, he’s said he expects Alexion to help drive growth in the field to the tune of double digit revenue through 2025.
The rosy projections still have to perform, however, and many are likely to scrutinize the pipeline AstraZeneca is acquiring in the deal. Andexxa, one of Alexion’s approved medicines to treat acutely uncontrolled bleeding of Factor Xa inhibitors, returned disappointing sales numbers and proved pivotal in mounting activist pressure on CEO Ludwig Hantson in 2020.
Dunoyer, who will lead the new Alexion subsidiary when the deal is complete, told Endpoints News in an interview last month that AstraZeneca doesn’t plan to auction off Andexxa, and instead hopes to turn it around in a similar fashion to the drugmaker’s Brilinta drug.
Of course, it does help that AstraZeneca will immediately benefit from Soliris, which raked in more than $4 billion in sales in 2020, as well as Ultomiris, the planned successor for Soliris. Alexion has positioned Ultomiris to soak up most of the sales from the older drug once it hits its patent cliff later this decade, despite some new competition.
Wednesday’s greenlight from the UK was largely expected following the FTC signing off on the deal in April and the EU signaling its approval last week. The FTC review came despite President Joe Biden’s administration saying it would take a harsher stance on Big Pharma mergers in March, but none of the feared antitrust measures came to pass.
One reason may have been the lack of a pipeline overlap between the two companies, according to an analysis from Evaluate Pharma at the time. None of the companies’ marketed drugs have any crossover in indications, and the only pipeline candidate that could be seen as similar is Alexion’s cerdulatinib — a potential intersection with AstraZeneca’s blood cancer franchise.
And while the Alexion deal had been viewed by some as a potential bellwether for the industry, the FTC has been harsher on other companies so far this year. The commission has sued to block Illumina’s $8 billion buyout of Grail, expressing concerns over Illumina’s potential stranglehold on the DNA sequencing market.
The Illumina merger is running up against new headwinds as well, with the EU expected to launch a full-scale antitrust probe at the end of its review next week, Reuters reported Tuesday.