AstraZeneca to acquire US firm in $1.26bn deal

ASTRAZENECA IS to buy US company Ardea Biosciences for $1.26 billion, giving it a new gout drug to bolster a weak pipeline in a deal that feeds a wave of MA in the biotechnology sector.

The $32 a share acquisition – a 54 per cent premium to Ardea’s closing price on Friday – is worth $1 billion after deducting cash held by Ardea, the firms said yesterday.

The planned purchase shows Britain’s second-biggest drugmaker delivering on a promise to step up deal-making to fix its drug pipeline. Research head Martin Mackay said last month he was looking at acquisitions in the “low billions” of dollars.

“We will continue to do these external deals,” Mr Mackay said. “I think we will be talking about more as the year goes on.

The main asset secured by AstraZeneca is an experimental drug called lesinurad, or RDEA594, that is in final-stage Phase III clinical tests for treating patients with chronic gout who have too much uric acid in their blood.

Although gout is not a huge market, independent analyst firm Decision Resources put sales of drugs for the disease at $1.87 billion in 2019, with Ardea’s product – likely to be submitted for approval in the first half of 2014 – vying for a sizeable chunk of that business.

AstraZeneca and Ardea said they expected the deal to close in the second or third quarter.

AstraZeneca is facing competition from cheap generic versions of several key drugs, including its big-selling antipsychotic Seroquel that went off patent last month, at a time when its pipeline of new medicines is relatively barren.

Earlier this month AstraZeneca also signed a collaboration deal to jointly develop and sell five biotech drugs in Amgen’s developmental pipeline.

Management however is under pressure to do something more than simply slash costs, since it has forecast revenues will fall by more than 10 per cent in 2012, due to patent expiries.

Quarterly results on Thursday are likely to show earnings per share down 20 per cent and sales off 4.5 per cent, according to forecasts. Some shareholders have argued for a management shake-up, including the replacement of David Brennan as chief executive, which could happen when non-executive chairman Leif Johansson takes over in September. – (Reuters)