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Alexion (ALXN) to Acquire Wilson Therapeutics for $855M
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Alexion Pharmaceuticals, Inc. is the latest company to join the ongoing acquisitions spree in the biotech sector. The company recently announced that it will acquire Sweden-based Wilson Therapeutics.
Details of The Transaction
Alexion has offered SEK 232 in cash for each outstanding share of Wilson Therapeutics which translates into a total transaction value of $855 million. Alexion has already obtained shareholder support agreements from the four largest shareholders accounting for 57.4% of Wilson Therapeutics’ outstanding shares and two additional shareholders accounting for 8.7% for a total of 66.1% of the company’s outstanding shares. The transaction is expected to close in the second quarter.
Rationale Behind the Transaction
The acquisition will add a late-stage candidate, WTX101 to Alexion’s pipeline. The candidate is currently in phase III for the treatment of Wilson disease, a rare genetic disorder. The candidate is a first-in-class oral copper-binding agent with a unique mechanism of action and ability to access and bind copper from serum and promote its removal from the liver. The candidate has also obtained Fast Track designation in the United States and enjoys Orphan Drug Designation for the treatment of Wilson disease in the United States and EU.
Our Take
Alexion is looking to diversify its portfolio and reduce its dependence on its blockbuster drug Soliris. The deal will strengthen Alexion’s rare disease pipeline with a late-stage candidate.
However, investors weren’t much impressed with the news as the acquisition adds a candidate to the pipeline and not an approved drug. Thus, the stock lost 2.35% following the announcement. Moreover, the market opportunity for such a rare disease will be limited and might not boost the top-line as expected. Alexion’s shares have lost 21.7% in the last six months, compared with the industry’s decline of 16.2%.
Of late, quite a few biotech companies have been looking to strengthen their portfolio/pipeline. While 2017 was pretty ho-hum on this front with just a few key deals, 2018 is expected to see a surge in M&A primarily due to lower U.S. tax rates. Taking a clue from Gilead Sciences (GILD - Free Report) acquisition of Kite Pharma, Celgene recently acquired Juno Therapeutics to gain traction in the promising CAR-T space. Sanofi (SNY - Free Report) acquired Bioverativ Inc. which focuses on therapies for hemophilia and other rare blood disorders.
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Alexion (ALXN) to Acquire Wilson Therapeutics for $855M
Alexion Pharmaceuticals, Inc. is the latest company to join the ongoing acquisitions spree in the biotech sector. The company recently announced that it will acquire Sweden-based Wilson Therapeutics.
Details of The Transaction
Alexion has offered SEK 232 in cash for each outstanding share of Wilson Therapeutics which translates into a total transaction value of $855 million. Alexion has already obtained shareholder support agreements from the four largest shareholders accounting for 57.4% of Wilson Therapeutics’ outstanding shares and two additional shareholders accounting for 8.7% for a total of 66.1% of the company’s outstanding shares. The transaction is expected to close in the second quarter.
Rationale Behind the Transaction
The acquisition will add a late-stage candidate, WTX101 to Alexion’s pipeline. The candidate is currently in phase III for the treatment of Wilson disease, a rare genetic disorder. The candidate is a first-in-class oral copper-binding agent with a unique mechanism of action and ability to access and bind copper from serum and promote its removal from the liver. The candidate has also obtained Fast Track designation in the United States and enjoys Orphan Drug Designation for the treatment of Wilson disease in the United States and EU.
Our Take
Alexion is looking to diversify its portfolio and reduce its dependence on its blockbuster drug Soliris. The deal will strengthen Alexion’s rare disease pipeline with a late-stage candidate.
However, investors weren’t much impressed with the news as the acquisition adds a candidate to the pipeline and not an approved drug. Thus, the stock lost 2.35% following the announcement. Moreover, the market opportunity for such a rare disease will be limited and might not boost the top-line as expected. Alexion’s shares have lost 21.7% in the last six months, compared with the industry’s decline of 16.2%.
Of late, quite a few biotech companies have been looking to strengthen their portfolio/pipeline. While 2017 was pretty ho-hum on this front with just a few key deals, 2018 is expected to see a surge in M&A primarily due to lower U.S. tax rates. Taking a clue from Gilead Sciences (GILD - Free Report) acquisition of Kite Pharma, Celgene recently acquired Juno Therapeutics to gain traction in the promising CAR-T space. Sanofi (SNY - Free Report) acquired Bioverativ Inc. which focuses on therapies for hemophilia and other rare blood disorders.
Zacks Rank
Alexion currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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