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Alexion to acquire Achillion
Posted on Thursday, 17 October 2019 09:58
Alexion Pharmaceuticals has reached an agreement to acquire Achillion Pharmaceuticals for USD 930.00 million to add a clinical-stage portfolio of oral small molecule inhibitors to its pipeline.

The larger biotechnology company is offering USD 6.30 per item of stock held in the target, representing a premium of 72.6 per cent to its close of USD 3.65 on 15th October, the last trading day prior to the announcement.

Achillion’s stock price jumped 71.8 per cent following the news yesterday to end the day at USD 6.27 and a market capitalisation of USD 875.87 million.

Zephyr, the M&A database published by Bureau van Dijk, shows this transaction would place 18th in the top deals targeting pharmaceutical and medicine manufacturers announced globally in 2019 to date.

Alexion plans to finance the acquisition using cash on hand and will also assume the cash currently on its peer’s balance sheet, which was USD 230.00 million at 30th September 2019.

In addition, the transaction includes a potential earnout in the form of non-tradeable contingent value rights, to be paid to Achillion’s shareholders if certain clinical and regulatory milestones are met within specific periods.

The target is focused on developing oral small molecule factor D inhibitors to treat people with complement alternative pathway-mediated rare diseases such as paroxysmal nocturnal haemoglobinuria and C3 Glomerulopathy.

Achillion generated a net loss of USD 38.39 million in the six months to 30th June 2019, widened slightly from a net loss of USD 37.79 million in the corresponding period of 2018.

Completion is currently expected in the first half of 2020 and is still subject to the approval of regulatory agencies, shareholders and the clearance under the Hart-Scott Rodino Antitrust Improvements Act.

Shares in the acquiror closed down 5.1 per cent to USD 99.51 yesterday, giving the business a market capitalisation of USD 22.31 billion.

According to Zephyr, there have been 2,000 deals targeting pharmaceutical and medicine manufacturers announced worldwide in 2019 to date.

Five of these have exceeded the USD 10.00 billion barrier, including Bristol-Myers Squibb picking up Celgene for USD 74.00 billion and AbbVie, via Venice Subsidiary, buying Allergan for USD 63.53 billion.

Mylan of the Netherlands, Celgene's OTEZLA assets and Nestle Skin Health, among others, have also been targeted in large deals in the year so far.

© Zephus Ltd