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AstraZeneca (AZN) Gets FTC Clearance for Alexion Acquisition

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AstraZeneca PLC (AZN - Free Report) announced that the U.S. Federal Trade Commission or FTC has allowed the company to close its impending merger with Alexion Pharmaceuticals, Inc. (ALXN - Free Report) after the conclusion of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

The company has received competition clearances in Canada, Brazil and Russia while additional global regulatory clearances are currently pending in several other countries.

Last December, AstraZeneca entered into a definitive agreement to acquire Alexion for $39 billion. The acquisition will enable AstraZeneca to strengthen its position in immunology. The company already has a strong presence in the markets of oncology, cardiovascular, renal and metabolism, and respiratory diseases.

The acquisition is expected to close in the third quarter of 2021. Upon successful completion of the same, a dedicated business unit will be formed, which will be known as Alexion, The AstraZeneca Rare Disease Unit.

Shares of AstraZeneca have risen 1.5% so far this year compared with its industry’s increase of 1.7%.

price chart for AZN


We remind investors that Alexion currently markets blockbuster drug Soliris (eculizumab) – a first-in-class anti-complement component 5 (C5) monoclonal antibody which is approved for the treatment of patients with paroxysmal nocturnal haemoglobinuria (PNH), generalized myasthenia gravis and neuromyelitis optica spectrum disorder. The franchise was further strengthened when Alexion launched Ultomiris (ravulizumab) – a second-generation C5 monoclonal antibody with a more convenient dosing regimen.

Alexion also has a deep pipeline, including Factor D small-molecule inhibitors of the alternative pathway of the complement system, an antibody blocking neonatal Fc receptor (FcRn)-mediated recycling, and a bi-specific mini-body targeting C5, among others.

Per the press release, rare diseases represent a high-growth disease area with a high unmet medical need. Hence, the acquisition will help AstraZeneca have a broad coverage across highly specialized care as Alexion has been progressing from ultra-orphan to orphan and specialty conditions.

Zacks Rank& Stocks to Consider

AstraZeneca currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare sector include Zoetis Inc. (ZTS - Free Report) and Repligen Corporation (RGEN - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zoetis’ earnings estimates have been revised 5.2% upward for 2021 and 4.2% upward for 2022 over the past 60 days. The stock has inched up 1.3% year to date.

Repligen’s earnings estimates have been revised 15.1% upward for 2021 and 9.8% upward for 2022 over the past 60 days. The stock has rallied 11.3% year to date.

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