AstraZeneca Reloads its Pipeline with Ardea Deal, Could be Still Hunting
AstraZeneca (NYSE: AZN), the global pharmaceutical giant based in London, is replenishing its drug pipeline with its acquisition of San Diego’s Ardea Biosciences (NASDAQ: RDEA), which was disclosed by both companies earlier today.
Britain’s second-largest drugmaker also could still be hunting, and might even have another San Diego company in its sights, according to press reports.
Ardea, founded in 1994, is focused on developing small-molecule drugs for the treatment of HIV, cancer, and inflammatory diseases. As Luke wrote a few years ago, the company lucked into its most advanced drug candidate, lesinurad, when Ardea scientists noticed a drug under development for treating HIV had reduced the amount of uric acid in the blood. Abnormally high levels of uric acid in the bloodstream can lead to a build-up of painful uric acid crystals in and around the connective tissue of the joints and in the kidneys—a condition also known as gout.
Lesinurad is now in late-stage development as a potential treatment for the chronic management of gout.
Meanwhile, half of AstraZeneca’s revenues are set to evaporate through 2016 as drug patents expire. The merger therefore is viewed as an effective way to replenish AstraZeneca’s drug pipeline, and boost shareholder support for CEO David Brennan ahead of the company’s annual meeting set for Thursday.
Under the terms of the agreement, AstraZeneca will acquire Ardea for $32 a share, which represents a total value of approximately $1.26 billion, including existing cash. The offer is more than 50 percent above Ardea’s closing price of $20.84 on Friday. The $1 billion net of cash deal is AstraZeneca’s biggest acquisition in five years.
Some press accounts suggest that AstraZeneca’s Ardea deal could be the first in a series of acquisitions of the British pharmaceutical. Astra Zeneca research chief, Martin Mackay, told the Reuters news agency last month he was looking at acquisitions in the “low billions” of dollars.
AstraZeneca has been identified as a potential bidder for Amylin Pharmaceuticals (NASDAQ: AMLN), the San Diego diabetes drug developer. Amylin, which spurned a $3.5 billion offer from Bristol-Myers Squibb earlier this year, has been working with Credit Suisse and Goldman Sachs to reach out to potential buyers, according to a report in The New York Times’ DealBook. Amylin’s willingness to consider a buyout follows pressure from Carl Icahn, the activist investor who has urged Amylin to seek a buyer and has threatened a proxy fight.