AstraZeneca to Acquire Amplimmune

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AstraZeneca (AZN) recently announced that its global biologics research and development arm, MedImmune, has entered into an agreement to acquire privately-held U.S. based company, Amplimmune. The deal is expected to close in the third quarter of 2013.

As per the terms of the deal, AstraZeneca will make an upfront payment of $225 million to Amplimmune. Amplimmune will also be eligible to receive development-based milestone payments of up to $275 million from AstraZeneca.

With this acquisition, AstraZeneca will be strengthening its oncology pipeline. Amplimmune focuses on developing treatments related to cancer immunology. The Amplimmune acquisition will add oncology candidates such as AMP-224 (phase Ib) and AMP-514 (late-stage pre-clinical trial with investigational new drug filing planned by year end) to AstraZeneca’s pipeline.

This deal is in line with AstraZeneca’s strategy of boosting its pipeline by acquiring candidates. Generic competition has been adversely impacting AstraZeneca’s revenues over the past few quarters. This has put significant pressure on the company.

In a bid to add late-stage candidates to its pipeline, AstraZeneca entered into a number of acquisition deals (Pearl Therapeutics and Omthera Pharmaceuticals) in the last few months and agreements with companies such as FibroGen, Inc.

We believe the proposed acquisition of Amplimmune makes strategic sense. AstraZeneca already has a number of immune-mediated cancer candidates including tremelimumab and MEDI-4736. Amplimmune’s technology and pipeline will boost AstraZeneca’s pipeline and generate synergies.  

The AstraZeneca – Amplimmune announcement comes close on the heels of the news of Amgen’s (AMGN) upcoming acquisition of Onyx Pharmaceuticals, Inc. (ONXX) for $10.4 billion. We note that several pharma and biotech companies are focusing on acquiring pipeline candidates and products that look promising, instead of developing a product from scratch, which involves a lot of funds and time.

AstraZeneca currently carries a Zacks Rank #3 (Hold). At present, companies like Biogen Idec (BIIB) look well-positioned with a Zacks Rank #1 (Strong Buy).

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