How the price of AstraZeneca's buyout of CinCor fell by $1.4B
CinCor scored a $1.8 billion buyout deal with AstraZeneca earlier this month, but according to recently released documents, it almost walked away from the deal table with much more than that.
In September, AstraZeneca offered to buy CinCor for $60 per share plus a contingent value right of $6 per share, adding up to $3.2 billion if all milestones had been achieved, according to an SEC filing published on Monday. However, the CinCor board and CEO Marc de Garidel wanted to see more cash upfront.
De Garidel made a counteroffer to AstraZeneca CEO Pascal Soriot of $63 per share without a CVR the following day. Soriot’s response? AstraZeneca was still interested, but they’d need to see forthcoming data from the company’s HALO trial in patients with uncontrolled hypertension before making a final decision.
On Nov. 28, CinCor revealed that its lead drug baxdrostat failed the HALO trial, sending its stock price plummeting nearly 47%. A few weeks later, AstraZeneca made another (much lower) offer: $22 per share, with a CVR of up to $10 per share, amounting to roughly $1.5 billion, at a 164% premium to CinCor’s closing price that day.
De Garidel told Soriot that the offer was “insufficient,” according to the filing, and that the CinCor board wanted an upfront offering of at least $30 per share. After more negotiation, the parties settled on $26 per share upfront, with a CVR of $10 per share that hinges on the “specified regulatory submission of a baxdrostat product.”
Baxdrostat, a revived Roche drug, is designed to block the production of aldosterone, a hormone linked to increased blood pressure that’s long been of interest in the treatment of hypertension. However, selectivity has been a challenge. If not careful enough, scientists run the risk of blocking the production of cortisol, which would counter the blood pressure-lowering effect of aldosterone reduction.
Topline results from the Phase II BrigHTN trial showed that patients with treatment-resistant hypertension on a 2 mg dose of baxdrostat saw an 11 mm Hg reduction in systolic blood pressure compared to placebo at week 12 (p<0.001), with no instances of adrenocortical insufficiency. That success sparked interest from a handful of companies, including AstraZeneca, however the British pharma was the only one to make a proposal.
De Garidel told Endpoints News earlier this month that researchers saw a “very profound placebo effect” in the HALO study, and that some patients may not have been taking the drug as recommended.
“Something went wrong. In that study, the placebo arm was much, much, much greater than normal,” he said. “These are things that we are currently investigating.”
AstraZeneca also offered to buy CinCor for $700 million upfront with $400 million in milestones back in December 2021, before the company’s IPO — an offer that the board deemed “inadequate” at the time, according to the documents.