AstraZeneca PLC on Thursday said it would buy a 55% stake in biotech company Acerta Pharma for $4 billion, in the U.K. drugmaker’s latest effort to rebuild its pipeline.
AstraZeneca said it would pay an initial $2.5 billion for the stake and then a further unconditional $1.5 billion upon receipt of the first U.S. regulatory approval for Acerta’s blood cancer drug, acalabrutinib, or the end of 2018, whichever comes first.
The U.K.-based drugmaker also has the option to buy the rest of Acerta for a further $3 billion subject to certain milestones.
The Wall Street Journal reported earlier this month that the two companies were in advanced talks regarding a deal.
Acerta, based in the Netherlands and U.S., doesn’t have any drugs on the market buts its lead compound has shown promise in early clinical trials. The closely held company is developing drugs to treat different types of cancer and autoimmune diseases, two of the drug industry’s biggest markets.
AstraZeneca Chief Executive Pascal Soriot said the investment was consistent with the company’s focus on long-term growth.
“Acalabrutinib provides us with a small molecule presence in blood cancers to complement our existing immunotherapy approach, in collaboration with Celgene in hematological malignancies,” he added.
The deal marks AstraZeneca’s latest move to refresh its pipeline to contend with sales lost as generic alternatives to top-sellers such as cholesterol fighter Crestor hit the market in the coming years.
After spurning a $120 billion takeover bid from Pfizer Inc. last year, Mr. Soriot said he would consider small and midsize deals to boost its drug pipeline. The company last month agreed to pay $2.7 billion for California biotech ZS Pharma Inc. and its cardiovascular compound, and Mr. Soriot has said cancer treatments are a key focus of the company’s rebuilding efforts.
On Wednesday AstraZeneca said it had agreed to pay $575 million to acquire the respiratory business of Japan’sTakeda Pharmaceutical Co. and separately announced an investment of up to $100 million in Chinese biological-drug manufacturer WuXi AppTec for the option to acquire the company, and spend $50 million expanding its own manufacturing facilities in China.