- Rare disease drugmaker Alexion will buy Portola Pharmaceuticals for $1.44 billion, the latest deal aimed at expanding its business beyond Soliris, its flagship product and top-selling therapy.
- Alexion will pay $18 per share for Portola, a roughly 130% premium over Portola's closing stock price on May 4. Even with the sizable premium, however, Alexion is acquiring the biotech at a discount to the roughly $24 per share at which Portola traded to begin 2020.
- By buying Portola, Alexion is betting it can greatly increase sales of Portola's chief drug Andexxa, which is used to reverse the effects of popular blood thinning drugs like Xarelto and Eliquis. Since winning U.S. approval for Andexxa in May 2018, Portola has had trouble building a market for the drug.
Biotech deals have been comparatively few so far in 2020, a year in which many predicted the record activity seen last year would continue. The economic disruption caused by the coronavirus pandemic has likely played a major role, although companies are still brokering fundraising and licensing agreements — at times via video conferencing.
This week has brought two outright acquisitions, first of cancer drugmaker Stemline Therapeutics and then of Portola. They are the first notable buyouts since Gilead's March purchase of Forty Seven for $4.9 billion and Eli Lilly's January takeover of Dermira for $1.1 billion.
By this time last year, for comparison, there were eleven major company or production acquisitions, including five worth over $1 billion.
Portola is the fourth company Alexion has bought since 2018, following deals for Achillion Pharmaceuticals, Syntimmune and Wilson Therapeutics. All fit under a diversification strategy Alexion has pursued to reduce its dependence on Soliris, an extremely pricey rare disease drug that accounted for 80% of the company's net product sales last year.
Unlike those earlier three, however, Alexion's acquisition of Portola places the company in a broader, rather than rare disease, market.
Portola's main drug Andexxa is what's known as a reversal agent for Factor Xa inhibitors, a class of anticoagulant drugs that includes Bristol Myers Squibb and Pfizer's Eliquis as well as Johnson & Johnson and Bayer's Xarelto.
This year, some 18 million people in the U.S. and Europe are expected to be treated with Factor Xa inhibitors, which are used to reduce the risk of blood clots in conditions like atrial fibrillation.
Alexion and Portola estimate about 3% to 5% of those patients will show up at a hospital with a major bleed exacerbated by blood thinning treatment. Andexxa works as an antidote of sorts, reversing the effects of blocking Factor Xa.
But the drug has never sold particularly well, hampered first by manufacturing issues that delayed a full commercial launch by months and then by limited hospital access to the drug, according to Paul Matteis, an analyst at the investment bank Stifel.
"The case for the deal rests on Alexion's ability to better commercialize an expensive hospital product through its network of hospital-based physicians and deep payer relationships," he wrote in a May 5 note to clients.
Last year, sales of the drug totaled some $112 million, although fourth quarter figures disclosed by Portola were 20% below third quarter sales.
In announcing the deal to investors, Alexion argued its marketing of Andexxa will be aided by a "near complete overlap" between the hospitals and physicians it's already targeting for Soliris and its successor drug Ultomiris.
The COVID-19 pandemic, which has overwhelmed hospitals in some states and limited capacity in others, will make engaging with hospitals on a new product much more difficult, however.
For Portola, the buyout ends a 17-year run as an independent company. In all but two of those years, Portola operated at a loss, accumulating a deficit of more than $1.8 billion. After debuting on the public markets in 2013, Portola shares peaked in 2017 at $66 per share.