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AstraZeneca PLC AZN announced that the European Commission has allowed the company to close its impending merger with Alexion Pharmaceuticals, Inc. ALXN. The deal is expected to close in the ongoing quarter.
The company has already received competition clearances for the above acquisition in the United States, Canada, Japan and several other countries. However, authorities in the United Kingdom are yet to give it clearance. AstraZeneca must have clearance in the United Kingdom to complete the deal.
Shares of AstraZeneca have rallied 21.6% so far this year compared with its industry’s growth of 10%.
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Notably, in December 2020, AstraZeneca entered into an agreement to acquire Alexion for $39 billion. The acquisition will enable AstraZeneca to strengthen its position in immunology. The company already has a strong presence in the markets of oncology, cardiovascular, renal and metabolism, and respiratory diseases.
Subsequently, in May 2021, shareholders of both companies voted in favor of the acquisition.
Upon successful completion of the same, a dedicated business unit will be formed, which will be known as Alexion, AstraZeneca Rare Disease, and will have its headquarters in Boston, MA.
We remind investors that Alexion currently markets blockbuster drug Soliris (eculizumab) – a first-in-class anti-complement component 5 (C5) monoclonal antibody – approved for the treatment of patients with paroxysmal nocturnal haemoglobinuria, generalized myasthenia gravis and neuromyelitis optica spectrum disorder. The franchise was further strengthened when Alexion launched Ultomiris (ravulizumab) – a second-generation C5 monoclonal antibody with a more convenient dosing regimen.
We note that rare diseases represent a high-growth disease area with a high unmet medical need. Hence, the acquisition will help AstraZeneca have a broad coverage in highly specialized care and become a leader in immunology and precision medicines.
Zacks Rank & Other Stocks to Consider
AstraZeneca currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the healthcare sector include Zoetis Inc. ZTS and Bayer Aktiengesellschaft BAYRY, both carrying the same Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zoetis’ earnings estimates have been revised 1.6% upward for 2021 and 1.8% upward for 2022 over the past 60 days. The stock has rallied 16.5% year to date.
Bayer’s earnings estimates have been revised 4% upward for 2021 and 5.8% upward for 2022 over the past 60 days. The stock has inched up 3.6% year to date.
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AstraZeneca PLC (AZN) : Free Stock Analysis Report
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