- AstraZeneca said the Federal Trade Commission has authorized its $39 billion acquisition of rare disease drug developer Alexion, following green lights from regulators in Canada, Brazil and Russia. The U.K. company now expects to be able to complete the deal in the third quarter of 2021, pending approvals in some remaining jurisdictions.
- The deal, the largest announced in 2020, aims to beef up AstraZeneca's portfolio by adding Alexion's marketed drugs for orphan blood conditions and enzyme deficiencies. It continues the big pharma's evolution away from primary care drugs and into specialty offerings.
- The FTC's decision may be seen as good news for biopharma dealmakers, since the regulator has signaled it will be looking more closely at acquisitions out of concern they may be thwarting the research and development of new drugs. In 2019, the regulator held up one acquisition for months and mandated a product divestment in another before agreeing to approve the deals.
There is little crossover between Alexion's products and AstraZeneca's business, which focuses on cancer drugs as well as treatments for respiratory, cardiovascular and metabolic diseases. That lack of overlap likely alleviated FTC fears that the bigger company could use the transaction to gain market power.
Now, clearance from the FTC indicates that the AstraZeneca-Alexion deal will draw to a routine conclusion, assuming regulators in the U.K, European Union and Japan agree there are no anti-competitive aspects.
Still, similar deals could face increased scrutiny in coming years, as FTC officials have said they plan to take a close look at the effects future biopharma transactions could have on competition. Three deals in 2019 — Roche's buyout of Spark Therapeutics, Bristol Myers Squibb's purchase of Celgene, and AbbVie's acquisition of Allergan — heightened the regulator's concerns.
In these transactions, one of the main concerns is that the acquiring company could kill or slow drug candidates in the pipeline of the target company in order to protect the market share of a commercial product. Celgene, for example, was required to sell autoimmune disease drug Otezla before the Bristol Myers acquisition could be completed because of the bigger company's ownership of similar drug, Orencia, and a second product in development.
Allergan, meanwhile, sold a pipeline drug called brazikumab because AbbVie marketed a rival therapy called Skyrizi.
Similarly, completion of the Roche-Spark transaction was delayed for months under FTC review. Spark has a gene therapy in development that, if successful, would compete with Roche's marketed product Hemlibra.
The FTC doesn't appear to have any problems for AstraZeneca and Alexion, however, which is seen by some as a good sign for future biopharma dealmaking.
"FTC’s review of the Astra/Alexion acquisition was viewed as a first major bellwether after the headline about FTC wanting to scrutinize deals more closely came out," biotech investor Brad Loncar said on Twitter. "While it’s only one deal, it should be positive for the sector that this went through with no issues."
Alexion's restive investors, who have experienced years of suppressed share prices in spite of the company's growth, should be relieved at the news. The company relies on one product, Soliris, for most of its revenue, and that could decline in about four years as generic competitors emerge.
Shareholders of both companies are expected to vote on the deal May 11, AstraZeneca said.