AstraZeneca (AZN) Set to Acquire Gracell for $1.2 Billion
AstraZeneca PLC AZN announced that it has entered into a definitive agreement to acquire clinical-stage biopharmaceutical company, Gracell Biotechnologies Inc. GRCL for a total deal value of up to $1.2 billion.
Gracell is developing clinical-stage candidate GC012F, a FasTCAR-enabled BCMA and CD19 dual-targeting autologous chimeric antigen receptor T-cell therapy, as a potential new treatment for multiple myeloma, as well as other haematologic malignancies and autoimmune diseases, such as systemic lupus erythematosus.
The impending acquisition will add Gracell’s lead candidate, GC012F, to AstraZeneca’s portfolio of innovative cell therapies that are being studied for the treatment of cancer and autoimmune diseases.
A phase Ib/II study is currently evaluating GC012F for the treatment of relapsed or refractory multiple myeloma in the United States.
Shares of AstraZeneca have lost 1.6% in the past year against the industry’s increase of 6.3%.
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Per the terms of the agreement, AZN will acquire all of Gracell shares for a price of $2 per share in cash. This upfront cash portion of the transaction amounts to approximately $1 billion.
The acquisition agreement also includes a non-tradable contingent value right for up to $0.30 per share in cash contingent upon the achievement of certain regulatory milestones.
Combining the upfront payment amount and the maximum potential contingent value payments, if achieved, will bring the total transaction value up to $1.2 billion. This represents an 86% premium over Gracell’s closing market price on Dec 22, 2023.
Additionally, AstraZeneca is also entitled to acquire the cash and short-term investments on GRCL’s balance sheet, which totaled $234.1 million as of Sep 30, 2023, per the terms of the agreement.
Subject to the fulfillment of certain customary and regulatory conditions, the above acquisition agreement is expected to close in the first quarter of 2024.
Through this acquisition, AZN is looking to accelerate its cell therapy strategy in haematology with the addition of GRCL’s GC012F.
The M&A trend of 2023 shows that there is an increasing interest in biotech companies making innovative cancer treatments. In November 2023, AbbVie ABBV announced a definitive agreement to acquire ImmunoGen for $10.1 billion, including its new ovarian cancer drug, Elahere.
The transaction is expected to close in mid-2024, subject to shareholder and regulatory approval. The acquisition is likely to diversify AbbVie’s oncology pipeline across solid tumors and hematologic malignancies.
In October 2023, Bristol Myers BMY announced that it is set to acquire commercial-stage oncology company Mirati Therapeutics for a total equity value of $4.8 billion-plus contingent value right of approximately $1.0 billion.
The acquisition will add Mirati’s new lung cancer drug, Krazati (adagrasib), to BMY’s strong oncology portfolio.
Zacks Rank
AstraZeneca currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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