AstraZeneca PLC AZN -1.11% has struck a deal to buy a portfolio of gene therapies from Pfizer Inc. PFE -0.58% for up to $1 billion, the biopharma company announced Friday.
The deal, expected to close in the third quarter, gives AstraZeneca a group of early-stage gene therapies that target rare diseases. Genomic medicine “has potential to be transformative and even curative for patients with devastating diseases,” Marc Dunoyer, CEO of Alexion, AstraZeneca’s rare-disease unit, said in a statement.
AstraZeneca’s deal wasn’t the only one announced Friday to focus on rare diseases. Biogen Inc. BIIB -1.81% said Friday that it had agreed to acquire Reata Pharmaceuticals Inc. RETA for $7.3 billion in a deal that will expand its rare-disease treatment portfolio.
AstraZeneca’s American depositary receipts, or ADRs, gained 5% Friday morning, after the company separately reported second-quarter results that beat analyst expectations, propelled by strong sales growth in rare diseases as well as oncology and other areas.
More than 7,000 rare diseases affect over 30 million people in the U.S., according to the U.S. Food and Drug Administration, and many are life-threatening and have no treatments. Complex biology and the relatively small number of patients with a given disease can make drug development for these conditions particularly challenging. The FDA’s “orphan drug” designation, which provides tax credits and up to seven years of market exclusivity, is intended to incentivize rare-disease drug development.
Genetic mutations are thought to be a common factor causing rare diseases. Genomic medicines target malfunctioning genes.
AstraZeneca jumped into the rare-disease business with its 2021 acquisition of Alexion Pharmaceuticals Inc., which it called “the beginning of a new chapter for AstraZeneca.” Late last year, AstraZeneca also acquired genomic medicine company LogicBio for a 660% premium.
AstraZeneca on Friday reported adjusted earnings per share of $2.15, beating the FactSet consensus of $1.98. Second-quarter sales totaled $11.42 billion, up from $10.77 billion in the year-earlier period and ahead of the FactSet consensus of $10.97 billion, despite declining revenues from COVID-19 medicines. Sales of AstraZeneca’s COVID-19 vaccine fell to zero in the second quarter, the company said.
AstraZeneca’s ADRs have gained 5.4% in the year to date, while Pfizer’s stock is down 29% and the S&P 500 SPX +0.27% is up 19%.
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