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Home » Alexion to acquire Synageva
Alexion to acquire Synageva
May 6, 2015
Cheshire, Conn.-based Alexion Pharmaceuticals will acquire Synageva, a biopharmaceutical company based in Lexington, Mass., for $115 in cash and 0.6581 Alexion shares for each share of Synageva, implying a total per share value of $230 based on the nine-day volume-weighted average closing price of Alexion stock through May 5.
The transaction has been unanimously approved by both companies’ boards of directors, and is valued at approximately $8.4 billion net of Synageva’s cash. The transaction is expected to accelerate and diversify Alexion’s growing revenues, and Alexion expects to achieve annual cost synergies starting this year and growing to at least $150 million in 2017. In addition, the transaction is expected to be accretive to non-GAAP earnings per share in 2018.
“Alexion is uniquely suited to advance Synageva’s mission to deliver life-saving therapies to patients whose diseases were once considered too rare for developing treatments,” said Sanj K. Patel, president and CEO of Synageva. “As Kanuma moves closer toward patients who suffer from LAL deficiency, and the other pipeline programs continue to progress, I am confident that this transaction will help continue to improve the lives of patients with LAL Deficiency and other devastating, rare diseases for years to come.”
The addition of Kanuma expands Alexion’s premier global metabolic rare disease franchise. Alexion will leverage its experience in rare disease education and diagnostics, and its 50-country operating platform, to maximize the opportunity to assist patients suffering from LAL-D.
Kanuma is under Priority Review with the FDA and has been granted accelerated assessment of its Marketing Authorization Application (MAA) by the EMA. Kanuma has been granted Breakthrough Therapy Designation by the FDA for LAL deficiency presenting in infants. Regulatory decisions in the U.S. and Europe are expected in the second half of 2015.
Alexion developed Soliris (eculizumab) from the laboratory through regulatory approvals, and currently provides Soliris to patients around the world with paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS), two life-threatening ultra-rare disorders. With Soliris, and following the anticipated approvals of Kanuma and Strensiq, Alexion will have three highly innovative and transformative therapies for patients with four devastating and rare diseases in 2015.
“By every measure, Alexion is at the strongest and most promising point in our history given the strength of our clinical, commercial and operational performance and the depth of our team,” said Leonard Bell, M.D., chairman of Alexion’s board of directors. “These strengths will enable us to accelerate the transformation of the lives of patients suffering from LAL-D around the world. Also, I am personally very pleased that Dr. Felix Baker, a deeply experienced board member and leader in the biopharmaceutical industry, will join the Alexion board of directors when our transaction is completed. I look forward to working with Felix as we pursue our ambitions to serve more patients with more severe and rare disorders.”
Synageva’s pipeline is complementary to Alexion’s growing portfolio of highly innovative product candidates for patients with devastating and rare diseases. Alexion will have a robust clinical pipeline with eight product candidates in clinical trials for 11 indications. The programs include Synageva’s SBC-103, an investigational enzyme replacement therapy in an ongoing phase I/II trial for patients with mucopolysaccharidosis IIIB (MPS IIIB), a genetic and progressive rare metabolic disease. SBC-103 was granted Fast Track designation by the FDA in January.
In addition, Alexion will have more than 30 diverse preclinical programs across a range of therapeutic modalities, including 12 from Synageva’s novel drug discovery platform. At least four preclinical candidates from the combined pipelines are expected to enter the clinic by year-end 2016.
Alexion also will have expanded manufacturing capabilities with three Synageva upstream facilities. Synageva brings to Alexion a proprietary manufacturing technology, known as the expression platform, an integrated system of proprietary vectors that can be used to produce proteins with human-like glycosylation patterns, creating additional therapies with better targeting capabilities and the potential for greater efficacy.
The completion of the exchange offer and the merger are subject to customary closing conditions, the tender of a majority of the outstanding shares of Synageva common stock and receipt of required regulatory approval. The transaction is expected to close mid-2015. The merger agreement provides that Alexion may, in certain circumstances, determine to alternatively effect the transaction through a one-step merger, in which case a meeting of Synageva stockholders would be held to vote on the transaction.
In connection with the Transaction, Synageva shareholders, including affiliates of Baker Brothers Investments, have entered into voting and support agreements with Alexion covering approximately 33.5% of Synageva’s outstanding shares.
The company also announced that its board of directors has increased the size of the company's share repurchase authorization to a total of $1 billion. The board’s authorization is open-ended and does not establish a timeframe for the purchases; however, no repurchases will be made during the pendency of the transaction.
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