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AstraZeneca Agrees $39 Billion Takeover of Alexion Pharmaceuticals

AstraZeneca, which is struggling match its rivals' success in coronavirus vaccine trials, has agreed a $39 billion takeover of rare disease specialists Alexion Pharmaceuticals.

AstraZeneca  (AZN) - Get Astrazeneca PLC Sponsored ADR Report agreed to a $39 billion takeover of rare disease expert Alexion Pharmaceuticals  (ALXN) - Get Alexion Pharmaceuticals, Inc. Report Saturday as it struggles to keep pace with rivals in finalizing its coronavirus vaccine.

AstraZeneca will pay $60 a share in cash for the Boston-based drugmaker, as well as 2.1243 in its U.S.-listed shares per each outstanding Alexion share. The combination values Alexion at $175 per share in total, a 44.6% premium to its Friday closing price on the Nasdaq. 

The deal is expected to close in the third quarter of next year, the companies said, with AstraZeneca owning around 85% of the combined group. 

Alexion lifted its 2020 revenue guidance in October, and set a 2025 target of between $9 billion and $10 billion in annual sales, while noting its rare disease pipeline had grown to more than 20, with “the potential for 10 promising launches by 2023"

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"Alexion has established itself as a leader in complement biology, bringing life-changing benefits to patients with rare diseases. This acquisition allows us to enhance our presence in immunology," said AstraZeneca CEO Pascal Soriot. "We look forward to welcoming our new colleagues at Alexion so that we can together build on our combined expertise in immunology and precision medicines to drive innovation that delivers life-changing medicines for more patients."  

AstraZeneca's U.S.-listed shares closed at $54.27 each on Friday in New York, and have gained just 5.44% over the past six months, held back in part by confusion surrounding its developing coronavirus vaccine and the rapid advances and approvals from rivals such as Pfizer  (PFE) - Get Pfizer Inc. Report and Moderna  (MRNA) - Get Moderna, Inc. Report.

 A U.S. study of its AZD1222 vaccine, involving around 30,000 participants, is expected to conclude in January, the company said last week, after data from a previous trial in Britain and Brazil showed the average efficacy rate of the three dosage variants was around 70% -- and only 62% when used in two separate doses --  a much lower result than that achieved by Pfizer and Moderna's messenger-RNA based techniques. 

Pfizer's vaccine was granted Emergency Use Authorization (EUA) by the U.S. Food & Drug Administration late Friday, and has already been rollout in the the United Kingdom following approval from health officials earlier this week.

The FDA will consider Moderna's EUA application on December 17.