Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
AstraZeneca is set to make one of its first acquisitions in China, announcing plans to acquire Gracell Biotechnologies for up to $1.2bn to increase its investment in cell therapies for treating cancer.
The Anglo-Swedish drugmaker has been trying to use its status as one of the largest drugmakers in China by sales to hunt for potential deals.
But, like rival large pharmaceutical companies, it has mainly signed licensing agreements for particular drugs, rather than outright acquisitions.
Under the terms of the deal, AstraZeneca will acquire all of Gracell’s fully diluted share capital at a price of $2 per ordinary share in cash, plus $0.30 per share more if it hits a regulatory milestone.
This would lead to a transaction value of $1.2bn, an 86 per cent premium to the company’s share price on December 22. The deal is expected to close in the first quarter of 2024.
AstraZeneca said on Tuesday that the proposed acquisition would add a potential new treatment for multiple myeloma, a type of bone marrow cancer.
Susan Galbraith, executive vice-president of oncology research and development at AstraZeneca, said the deal would accelerate the company’s cell therapy strategy in blood cancers. It is already developing innovative but hard to produce immunotherapy CAR-T treatments.
She said the new drug candidate was a “potential best-in-class treatment” that uses a “differentiated manufacturing process” and could also be used to treat autoimmune diseases.
Earlier this year, Pascal Soriot, AstraZeneca’s chief executive, expressed excitement about the “explosion” of biotech companies and innovative science in China after a tour of the country.
He insisted the market was “completely open” for investment from multinationals such as AstraZeneca, adding that the pharmaceutical industry did not suffer from the same kind of “tensions” with China faced by other sectors because of its geopolitical rift with the US.
In August, AstraZeneca signed a deal with China’s CanSino Biologics for the production of its potential mRNA vaccines.
In November, the drugmaker announced a licensing agreement with Shanghai-based Eccogene for a potential obesity pill, which belongs to the same category as Novo Nordisk’s Wegovy weight loss treatment.
The Chinese biotech industry is also attracting attention from other foreign drugmakers.
GSK’s chief commercial officer Luke Miels told the Financial Times this month that the UK pharmaceutical company was hunting for deals in China, having rebuilt a “very strong relationship” with the government and companies after a corruption scandal a decade ago.
GSK signed three deals this year with Chinese companies, two licensing assets and another distribution agreement.
William Cao, Gracell’s chief executive, said it was looking forward to working with AstraZeneca “to accelerate our shared goal of bringing transformative cell therapies to more patients living with debilitating diseases”.
Read the full article here
