AstraZeneca boost oncology portfolio with $4bn Acerta Pharma deal

Anglo-Swedish pharmaceutical giant AstraZeneca is acquiring a majority stake in Acerta Pharma, a privately-owned biopharmaceutical company based in the Netherlands and US, in a deal worth $4 billion.

The announcement comes a day after the company announced the acquisition of the respiratory business of Japan's Takeda Pharmaceutical Company in a deal worth $575 million. (See: AstraZeneca to acquire Takeda's respiratory business for $575 million)

AstraZeneca will acquire 55-per cent of the entire issued share capital of Acerta for an upfront payment of $2.5 billion. It will pay an additional $1.5 billion on receipt of the first regulatory approval for acalabrutinib, a best-in-class drug under development for treatment of blood cancer.

The transaction provides AstraZeneca with an irreversible right to oral Bruton's tyrosine kinase (BTK) inhibitor, acalabrutinib (ACP-196), which is currently in Phase III development for B-cell blood cancers and in Phase I/II clinical trials in multiple solid tumours.

The agreement also includes options which, if exercised, provide the opportunity for Acerta shareholders to sell, and AstraZeneca to buy, the remaining 45 per cent of shares in Acerta.

The options can be exercised at various points in time, conditional on the first approval of `acalabrutinib' in both the US and Europe and when the extent of the commercial opportunity has been fully established, at a price of approximately $3 billion net of certain costs and payments incurred by AstraZeneca and net of agreed future adjusting items, using a pre-agreed pricing mechanism.

''The investment is consistent with our focus on long-term growth and reflects the role targeted business development plays in our business model. We are boosting a key area in our comprehensive oncology portfolio with a late-stage, potential best-in-class medicine that could transform treatment for patients across a range of blood cancers,'' Pascal Soriot, chief executive of AstraZeneca, said.

''Acalabrutinib provides us with a small molecule presence in blood cancers to complement our existing immunotherapy approach, in collaboration with Celgene in haematological malignancies. Furthermore, we look forward to working closely with the Acerta team and benefiting from the considerable clinical expertise they bring in this complex area of medicine,'' he added.

An extensive development programme is underway for `acalabrutinib' with the opportunity for initial regulatory submissions in the second half of 2016 for the treatment of patients with specific types of haematological malignancies.

Expanding further into B-cell cancers, 'acalabrutinib' is estimated to reach potential peak-year sales in excess of $5 billion globally. AstraZeneca will also benefit from the substantial expertise in haematological cancers offered by Acerta's approximately 150 employees.

The BTK inhibitor class is transforming the treatment of B-cell blood cancers, allowing a potentially more effective treatment option with limited side effects, replacing current chemotherapy and antibody-containing regimens.

`Acalabrutinib' is a highly selective, irreversible, next-generation small molecule oral BTK inhibitor supported by strong clinical evidence, with approximately 1,000 patients treated to date, of whom more than 600 were on the potential medicine as monotherapy.

Data indicate that 'acalabrutinib' offers enhanced BTK inhibition. Phase I/II data presented at the recent American Society of Haematology Annual Meeting 2015 showed a 95 per cent response rate in patients with relapsed chronic lymphocytic leukaemia, the most prevalent form of adult leukaemia, and a 100-per cent overall response rate in the difficult-to-treat patients.

In addition, acalabrutinib has the potential to address an unmet medical need for patients who are intolerant to or unsuitable for first generation BTK inhibitor treatment. Currently 20-30 per cent of patients discontinue first-generation therapy due to tolerability issues.

In addition to blood cancers, `acalabrutinib' is currently being explored in Phase I/II studies in combination with immunotherapy or chemotherapies in a range of solid tumours. Pre-clinical data show that 'acalabrutinib' has an immune-modulatory effect that, as monotherapy and alongside PD-1/PD-L1 antibodies, has the potential to enhance anti-tumour activity.

Acerta will initially be a majority owned subsidiary of AstraZeneca; if AstraZeneca acquires the remaining shares of the company in the future, Acerta would become a wholly-owned subsidiary. The transaction will be accounted for as a business combination and is expected to complete by the end of the first quarter of 2016, subject to customary closing conditions.

The initial acquisition payment of $2.5 billion will be funded from cash and debt. The agreement is expected to be moderately dilutive to AstraZeneca's core earnings in the near term.

On Tuesday, AstraZeneca had announced the acquisition of the core respiratory business of Japan's Takeda Pharmaceutical Company Limited in a deal worth $575 million (£383 million), giving itself access to a key drug to treat lung disease