AstraZeneca PLC Stays Mum on M&A, Says “No Comment” to Medivation Bid

AstraZeneca Stays Mum on M&A, Says “No Comment” to Medivation Bid April 29, 2016
By Mark Terry, BioSpace.com Breaking News Staff

While AstraZeneca ’s chief executive officer, Pascal Soriot, was outlining the British company’s cost-cutting plans to deal with its 12 percent drop in earnings, another part of the company’s strategy remained largely unmentioned—mergers and acquisitions.

With sagging profits of its biggest drugs, and the company’s Crestor for cholesterol’s U.S. patent protection ending next week, Soriot has put in place restructuring plans to save $1.1 billion annually, will lay off workers, and is pushing into the oncology market. Although the company largely stayed silent on any mergers and acquisitions, it indicates it is looking at potential deals when the price is right.

Soriot didn’t exactly rule out further mergers or acquisitions, but he did indicate that with its current pipeline pretty full, any future deals would have to hit a pretty high bar.

In November 2015, AstraZeneca acquired a majority equity stake for $4 billion of Acerta Pharma, headquartered in San Carlos, Calif. and Oss, the Netherlands. It has an option to buy the rest of the company for $3 billion. As part of that deal, it picked up ACP-196 (acalabrutinib), an irreversible oral Bruton’s tyrosine kinase (BTK) inhibitor, which is currently in Phase III trials for B-cell blood cancers and Phase I/II trials in multiple solid tumors.

In August 2015, the company signed a licensing deal with Heptares Therapeutics, a wholly-owned subsidiary of Sosei Group Corporation, for the worldwide rights to HTL-1071 for the treatment of several types of cancers. It was a smaller deal, paying $10 million upfront with additional near-term payments based on various milestones.

Also in November, AstraZeneca bought California-based ZS Pharma for $2.7 billion. ZS Pharma focuses on cardiovascular and metabolic diseases. Its pipeline drug, ZS-9, is a treatment for high potassium levels generally associated with chronic kidney disease and chronic heart failure.

There have been rumors that AstraZeneca might get into a bidding war with Paris-based Sanofi for Medivation . Just yesterday, Sanofi went public in a hostile bid for Medivation after the company ignored previous offers.

Medivation’s prostate cancer drug, Xtandi, with its marketing partner, Astellas Pharma , grew sales by 73 percent in the U.S. last year and 116 percent globally. Other companies rumored to be interested in Medivation include AbbVie , Roche and Novartis .

When asked specifically if AstraZeneca would make a bid for Medivation, Soriot declined to answer.

Much of the company’s investment has been in its pipeline, although so far its acquisitions seem to be working to reinforce its pipeline. Part of the company’s pipeline indicates a shift toward specialty care, which generally requires less sales specialists. The Wall Street Journal wrote today, “The change means that Astra’s research budget will continue to be higher than in the past, as specialty medicines require more clinical trials to develop, according to Mr. Soriot. At the same time, it will lead to a reduction in commercialization costs. Specialty care drugs require a fraction of the sales force for a primary care drug as they are used by far fewer physicians.”

Back to news