AstraZeneca to buy cancer drug developer in China for up to $1.2bn

AstraZeneca agreed to acquire Chinese cell therapy developer Gracell Biotechnologies for as much as $1.2 billion (€1.09 billion) as the British drug giant bolsters its bets on medical innovation in the world’s second-biggest economy.

Under the agreement, Astra will acquire Shanghai-based Gracell for $2 a share, amounting to an upfront cash payment of $1 billion. An additional share-purchase contingent on reaching certain regulatory milestones would eventually push the deal value to $1.2 billion, the companies said in a statement Tuesday.

The acquisition will enrich Astra’s pipeline with a so-called Car-T therapy that modifies a patient’s own immune cells to fight cancer. One candidate that Gracell has been working on, dubbed GC012F, could be a potential treatment for blood cancers such as multiple myeloma and autoimmune diseases like lupus, according to the statement.

While China is Astra’s second-largest market after the US, chief executive Pascal Soriot has previously said the firm was keen to tap into the country’s medical innovation that’s prompted many pharmaceutical giants from developed nations to work with local drugmakers to co-develop promising drug candidates with blockbuster potential.

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If Gracell is able to meet the required regulatory milestones, Astra’s offer price of equivalent to $11.50 per American depositary share represents an 86 per cent premium to Gracell’s closing price on December 22nd. Shares in Gracell are up almost 170 per cent this year. – Bloomberg