AstraZeneca’s (AZN) global biologics research and development arm, MedImmune, has acquired privately-held biotech company, Spirogen. Spirogen focuses on developing oncology related technology. As per the terms of the agreement, AstraZeneca acquired all shares of Spirogen for an initial consideration of $200 million and milestone payments of up to $240 million depending on attainment of predetermined targets.
AstraZeneca will also make a $20 million equity investment in Swiss-based oncology drug development company, ADC Therapeutics. As per the terms of the agreement, the companies will co-develop two of ADC Therapeutics’ candidates in preclinical development.
We remind investors that AstraZeneca acquired privately-held U.S. based company, Amplimmune, in Oct 2013. The deals are 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.
Meanwhile, AstraZeneca has entered into an agreement with Janssen Pharmaceutical K.K., a subsidiary of Johnson & Johnson (JNJ), to co-promote abiraterone acetate for prostate cancer in Japan. The drug is currently under regulatory review in Japan.
AstraZeneca, a large-cap pharma company, presently carries a Zacks Rank #3 (Hold). Other large-cap pharma stocks such as Roche (RHHBY) and Bayer (BAYRY) currently appear more attractive. While Roche carries a Zacks Rank #1(Strong Buy), Bayer carries a Zacks Rank #2 (Buy).