AstraZeneca has entered into a definitive agreement to acquire ZS Pharma, a biopharmaceutical company based in San Mateo, Calif. ZS Pharma uses its proprietary ion-trap technology to develop novel treatments for hyperkalaemia (high potassium levels), a serious condition of elevated potassium in the bloodstream, typically associated with chronic kidney disease (CKD) and chronic heart failure (CHF).
The transaction will give AstraZeneca access to the potassium-binding compound ZS-9, a potential best-in-class treatment for hyperkalaemia, a condition associated with increased mortality in CKD and CHF. ZS-9 is under regulatory review by the FDA with a Prescription Drug User Fee Act goal date of May 2016. A submission for European Marketing Application Authorization is planned by the end of 2015. Current estimates for global peak year sales of ZS-9 exceed $1 billion.
The acquisition continues AstraZeneca’s track record of targeted business development with a focus on three main therapy areas. ZS Pharma represents a strong fit with AstraZeneca’s pipeline and portfolio in cardiovascular and metabolic disease, one of the company’s three main therapy areas. AstraZeneca’s strategy focuses on reducing morbidity, mortality and organ damage by addressing multiple risk factors across cardiovascular disease, diabetes and chronic kidney disease. ZS-9 complements the company’s increasing focus on CKD and CHF, including the investigational medicine roxadustat, which currently is in phase III development for patients with anaemia associated with CKD, as well as its leading diabetes portfolio.
AstraZeneca will acquire all of the outstanding capital stock of ZS Pharma for $90 per share in an all-cash transaction, or about $2.7 billion in aggregate transaction value.
Upon completion, ZS Pharma, which has around 200 employees across three sites in California, Texas and Colorado, will become a wholly owned subsidiary of AstraZeneca. The transaction does not impact AstraZeneca’s financial guidance for 2015. It is expected to generate product sales from 2016, with minimal earnings dilution over 2016 and 2017, becoming accretive to AstraZeneca’s core earnings from 2018.