AstraZeneca PLC Coughs Up $2.7 Billion for Bay Area's ZS Pharma and its Hyperkalemia Treatment

AstraZeneca Coughs Up $2.7 Billion for Bay Area’s ZS Pharma and its Hyperkalemia Treatment
November 6, 2015
By Alex Keown, Breaking News Staff

LONDON – Looking to strengthen its cardiovascular and metabolic offerings, London-based AstraZeneca is snapping up Bay Area-based ZS Pharma in a deal worth $2.7 billion in hopes of leveraging that company’s ion-trap technology treatments for hyperkalemia into a blockbuster drug.

The deal, which will see AstraZeneca spend $90 per share for ZS Pharma, caused shares to soar more than 40 percent this morning. ZS Pharma stock is currently trading at $89.19 per share, up $25.97 per share.

AstraZeneca now has access to ZS Pharma’s lead hyperkalemia treatment ZS-9, which is currently under review by the U.S. Food and Drug Administration (FDA) with a Prescription Drug User Fee Act goal date of May 26, 2016. A submission for European Marketing Application Authorization is planned by the end of 2015. ZS Pharma, founded in 2008, uses proprietary ion-trap technology to develop drugs that mimic or exploit the body’s own ion channels. The company estimates global peak year sales of ZS-9 could exceed $1 billion.

A big money-making drug is something AstraZeneca is looking for to meet its revenue goal of $45 billion in sales by 2023. Acquiring new drugs through mergers and acquisitions will help the company offset declining revenues of drugs that are facing patent loss and increased generic competition, including the antacid Nexium and its heart drug Crestor. AstraZeneca said the acquisition of ZS Pharma continues the company’s record of targeted business development with a focus on three main therapy areas—cardiovascular disease, diabetes and chronic kidney disease.

Hyperkalemia is a life-threatening metabolic disorder caused by the inability of the kidneys to excrete potassium, which can lead to problems with the rhythm of the heart. It can be caused by chronic kidney disease and chronic heart failure. Hyperkalemia can be also be caused by some medications, including ACE inhibitor blood pressure medicines and beta blocker blood pressure medications. Some antibiotics can also cause hyperkalemia.

“Hyperkaliemia can be a life-threatening condition for patients with chronic kidney disease and chronic heart failure, however the risk is underappreciated and prevalence is increasing. This acquisition complements our strategic focus on Cardiovascular and Metabolic Disease by adding a potential best-in-class treatment to our portfolio of innovative medicines. We look forward to welcoming the ZS Pharma team to AstraZeneca,” Pascal Soriot, AstraZeneca’s chief executive officer, said in a statement.

AstraZeneca said ZS-9 will complement its investigational medicine roxadustat, which is currently in Phase III development for patients with anemia associated with CKD, as well as its leading diabetes portfolio.

ZS Pharma, which has approximately 200 employees, said the deal with AstraZeneca will help the company finalize the development and marketing of ZS-9 for the treatment of hyperkalemia. In September, ZS Pharma was wooed by Swiss-based Actelion Ltd. , which made a preliminary bid of $2.5 billion for the company. However, clearly that deal never went beyond the preliminary stages, which was something that analysts had predicted at the time.

Robert Alexander, ZS Pharma’s CEO, said the deal with AstraZeneca will allow the California-based company that has not yet generated any revenue, to tap into the English company’s metabolic and cardiovascular expertise for development and marketing of ZS-9.

The ZS Pharma deal comes a few weeks after AstraZeneca was forced to halt two clinical trials testing the combination of AZD9291 and durvalumab for lung cancer following reports of interstitial lung disease-like reports in one trial. In June, AstraZeneca submitted marketing authorization to the U.S. Food and Drug Administration (FDA). Earlier the FDA gave priority review to AZD9291. The drug had already been awarded Breakthrough Therapy designation, Orphan Drug and Fast Track status. Should AZD9291 make it to market, the drug is expected to yield annual revenue of approximately $3 billion.

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