AstraZeneca PLC Takes 55% Stake in Acerta Pharma for $4 Billion with Option to Buy Rest for Another $3 Billion
December 17, 2015
By Mark Terry, BioSpace.com Breaking News Staff
UK-based AstraZeneca PLC announced today that it is paying $4 billion to acquire a majority equity stake in Acerta Pharma, with an option to buy the rest of the company for $3 billion.
Acerta Pharma has headquarters in San Carlos, Calif. and Oss, the Netherlands. As part of the deal, AstraZeneca gets the company’s ACP-196 (acalabrutinib), an irreversible oral Bruton’s tyrosine kinase (BTK) inhibitor. ACP-196 is currently in Phase III clinical trials to treat B-cell blood cancers and in Phase I/II clinical trials in multiple solid tumors.
The drug may also be effective in autoimmune diseases such as rheumatoid arthritis and lupus.
“The BTK inhibitor class has been transformational in the management of B-cell cancers but a portion of patients treated with ibrutinib (the first generation BTK inhibitor), can’t tolerate the side effects and sadly discontinue their treatment,” said John Bird, professor and director, Division of Hematology, Department of Medicine, at The Ohio State University School of Medicine, in a statement. “The acalabrutinib data are highly encouraging as they show that high selectivity, a short half-life and an optimized dosing scheduling result in very high efficacy and a significantly better tolerability profile with very low discontinuation rates. Acalabrutinib may potentially offer improved long-term benefit over other options available for these patients.”
Although a $4 billion price tag for a single drug seems rather high, ACP-196 has the potential to be a best-in-class blockbuster. Analysts predict that if approved, it could sell more than $5 billion per year, with a potential $45 billion sales target by 2023.
“While significant clinical and commercial risks remain,” Richard Parkes, an analyst with Deutsche Bank , told Reuters, “the transaction could ultimately prove a stroke of genius, adding a multibillion-dollar potential drug launch in 2017 that could accelerate AstraZeneca’s re-emergence as a major force in oncology.”
This is another deal in AstraZeneca’s efforts to bolster its oncology segment. In August the company signed a licensing agreement with Heptares Therapeutics, a wholly-owned subsidiary of Sosei Group Corporation, for the worldwide rights to HTL-1071 for the treatment of a number of cancers.
Compared to the Acerta deal, the HTL-1071 was pocket change. AstraZeneca paid Heptares $10 million upfront with additional near-term payments based on various milestones.
Of the Acerta transaction, Pascal Soriot, AstraZeneca’s chief executive officer said in a statement, “The investment is consistent with our focus on long-term growth and reflects the role targeted business development plays in our business model. We are boosting a key area in our comprehensive oncology portfolio with a late-stage, potential best-in-class medicine that could transform treatment for patients across a range of blood cancers.”
AstraZeneca will pick up 55 percent of Acerta with an initial $2.5 billion payment. Another $1.5 billion will be paid when or if acalabrutinib receives approval by the U.S. Food and Drug Administration (FDA) , or by the end of 2018. At that point it could buy the rest of the company after European approval and U.S. approval and various other milestones.
The company expects to submit acalabrutinib to the FDA for regulatory approval in the second half of 2016. As reported by Reuters, Soriot indicated that the deal would strengthen its oncology business, but “he did not expect to buy in many more oncology assets.”
In November, AstraZeneca acquired California-based ZS Pharma for $2.7 billion. ZS Pharma focuses on cardiovascular and metabolic diseases. It’s pipeline drug, ZS-9, is a treatment for high potassium levels generally associated with chronic kidney disease and chronic heart failure.