AstraZeneca Plc has agreed to buy a portfolio of rare disease gene therapies from Pfizer Inc. as the UK drug company looks to the future for its next areas of revenue and growth.
(Bloomberg) — AstraZeneca Plc has agreed to buy a portfolio of rare disease gene therapies from Pfizer Inc. as the UK drug company looks to the future for its next areas of revenue and growth.
The agreement with Pfizer is worth up to $1 billion plus tiered royalties on sales and should complete in the third quarter, the company said Friday. The deal builds on Astra’s already substantial investment in its rare disease business since purchasing Alexion for $39 billion in 2021.
There are more than 7,000 known rare diseases and about 80% of them are believed to be caused by a genetic mutation. The disease areas targeted with the Pfizer acquisition are genetic diseases across liver, heart, muscle, central nervous system and kidney.
The transaction with Pfizer will accelerate the company’s ambitions to grow in cell and gene therapies, Astra Chief Executive Officer Pascal Soriot said in a Bloomberg TV interview.
“We believe cell therapy will be an important part of the future of medicine in cancer, but also outside of cancer,” Soriot said. “We have been actually building capabilities in gene therapy for quite some time now.”
Astra stock traded up more than 3% in early trading in London. The company also reported second-quarter sales and profit Friday that beat analysts’ estimates.
“The Pfizer deal makes strategic sense because a lot of rare diseases do have an important genetic component and gene therapies can play a meaningful role addressing these conditions,” said Adam Barker, an analyst at Goodbody Stockbrokers UC. “I imagine you will see Alexion building up a portfolio of technologies as having greater optionality means you can address more conditions.”
In a further development, long-time executive and biopharmaceuticals head of research Mene Pangalos is retiring after nearly 14 years at the company. Sharon Barr, head of research and development at Astra’s Alexion arm, will succeed him.
Questions still remain for Astra even after it reported half-year results with sales and profit beating expectations. While the company kept guidance for the year unchanged, investors are still awaiting detailed results from a key trial for its potentially game-changing lung cancer drug, datopotamab deruxtecan, that could overtake standard chemotherapy as a treatment option.
Shares in Astra and partner on the drug Daiichi Sankyo Co. fell sharply earlier this month following initial indications that raised questions about the drug’s effectiveness and safety.
Soriot said high-level results released from its key lung cancer trial are positive and people need to await the full readout.
“I have no doubt that when they see the detailed results they will be encouraged by what they see,” Soriot told Bloomberg TV. This product “will have a very important role to play.”
Soriot said the company has been talking to the US Food and Drug Administration about filing its results and the “FDA themselves see positive outlook for this product.”
The adverse stock reaction was overdone on the lung cancer results but it will take time to rebuild belief in the drug’s blockbuster potential, according to Peter Welford, analyst at Jefferies.
(Updates with more information on deal, analysts comments starting in first paragraph)
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