Alexion’s U.S. operations a key to AstraZeneca deal
With AstraZeneca one of several companies divvying up more than $10 billion in Operation Warp Speed funding to discover and distribute vaccines for COVID-19, the U.K.based company Monday confirmed it is spending four times that amount to acquire Alexion Pharmaceuticals to accelerate potential cures for thousands of other ailments flummoxing researchers.
AstraZeneca’s $39 billion offer for Alexion will pay stockholders $175 per share — $54 more than the stock’s closing price Friday, for a 44 percent premium.
Yale-New Haven Hospital physician Leonard Bell led the launch of Alexion in 1992, with Bell a disease pathology professor at Yale University where he received his own medical degree. Bell led Alexion through a 1996 initial public offering of stock and remained CEO through 2015, and was chairman of the board of directors for two more years.
In 2017 under then-newly named CEO Ludwig Hantson, Alexion moved its headquarters to Boston while keeping its New Haven office as a development lab.
“This is a great opportunity to bring more innovation to more patients globally,” Hantson said Saturday during a web conference presentation with investment analysts. “The workforce that we have at Alexion is very strong, and I’m very proud of who we are.”
AstraZeneca stated it will make Boston its U.S. headquarters for the investigation of treatments for rare diseases, without specifying immediately any plans for the New Haven office. The companies said they will generate $500 million by coupling their manufacturing and commercial functions. AstraZeneca CEO Pascal Soriot emphasized the company’s view of Alexion’s U.S. operations as a major asset as it weighed making the offer.
Soriot added that the company is positioned to push Alexion drugs into other markets, as well, including China, and held out hope for the combined company being able to develop new classes of oncology drugs. Nearly two years ago, Eli Lilly spent $8 billion to acquire Loxo Oncology, a Stamford company developing targeted therapies to treat cancer.
Alexion estimates the total population of people who could benefit from its drugs today at about 370,000 worldwide, but a senior AstraZeneca executive said Saturday the combined company is thinking bigger with their respective technical leaps of the past several years.
“It is feasible that many other common diseases could also have applications of these new (developments) — even in oncology,” said Marc Dunoyer, chief financial officer of AstraZeneca, who fielded many of the questions posed by analysts during the web conference presentation Saturday.
If getting its fair share of headlines this year alongside Pfizer and Moderna for its collaboration with University of Oxford researchers on a COVID-19 vaccine candidate, AstraZeneca’s past blockbuster drugs include Crestor to lower cholesterol, Nexium to treat heartburn and Prilosec for acid reflux.
During the Bell years, Alexion developed multiple drugs to treat rare illnesses not being addressed by other drug companies. To date, the U.S. Food & Drug Administration has approved four Alexion treatments, most prominently Soliris, with treats a rare, acquired, life-threatening blood disease known as paroxysmal nocturnal hemoglobinuria.
Just 20,000 people globally are known to suffer from PNH, compared to more than 72 million having been diagnosed with COVID-19. Last January, Alexion acquired New Haven-based Achillion Pharmaceuticals for $930 million, picking up a pair of drugs that use an alternate pathway to treat PNH.
One key Soliris patent expires next year, with Alexion claiming additional patent protection on other formulations that have varying patent expirations over the course of the coming decade. The company also sells Ultomiris to treat PNH and has been pitching physicians to prescribe it in place of Soliris,
which generated nearly $4 billion in global revenue last year compared to $339 million for Ultomiris.
“We’ve seen 70 ... percent conversion within 18 months, which is best-in-class conversion,” Hantson said. “What it means for patients (on)] Ultomiris, instead of going to the hospital every two weeks for an (intravenous) infusion, our Ultomiris patients can go for their infusions every two months. And ... I don’t need to tell you that is a big deal — for how you live your disease as a patient and also as a family, but it also has some economic benefits.”
Alexion also sells Strensiq, which brought in sales of $593 million last year helping patients afflicted with hypophosphatasia, or HPP, which interferes with normal development of bones and teeth. And an Alexion drug called Kanuma helps the body create an enzyme to break down fats and cholesterol in the blood for those suffering from a condition called lysosomal acid lipase deficiency, or LAL-D.
The FDA has approved treatments for only 5 percent of more than 7,000 rare diseases that are known today, according to data cited by AstraZeneca and Alexion in a release. Alexion has 20 more clinical development programs in its pipeline today, including one for Wilson’s disease, which causes copper accumulation in the brain, liver and other tissues.