AstraZeneca has acquired the San Diego-based biotech firm Ardea Biosciences for 1.26 billion USD, approximately 8.4 billion SEK. The deal was presented in April, just months after AstraZeneca announced substantial restructuring in research and development at its operations in Södertälje, resulting in the lay-off of about 1200 researchers and personnel.
“There is a lot of interesting medical research that is conducted outside Astra-Zeneca. The acquisition of Ardea is in line with our strategy to complement our R&D with external collaborations. This way we hope to increase efficiency in our research,” says Ann-Leena Mikiver, director of media relations at AstraZeneca.
Hopes for an increased market
Ardea works with small molecules. The company’s main drug candidate, Lesinurad, is in phase III tests for the treatment of gout and hyperuricemia. The substance is taken as a pill and blocks the enzyme urat1, which regulates
excretion of uric acid from the body. If the phase III-trial currently in progress is successful, AstraZeneca plans to file for approval in the us and eu in 2014. Although chronic gout is rather common, the global pharmaceutical market for gout is only estimated to be around 170 million usd (1.1 billion sek). The main reason for the relatively small total market is the lack of efficient medicines. However, with the help of new forms of pharmaceuticals, of which Ardea’s Lesinurad is one, AstraZeneca projects that the total market can increase to 1.9 billion usd by 2019. Needless to say, such projections should be taken with a grain of salt since it is extremely difficult to predict pharmaceutical markets seven years in advance. However, it is clear that the gout market has potential to grow substantially over the next 5-10 years.
Moving towards a flexible organisation
Besides Lesinurad, Ardea has three more projects in its development pipeline. One of those has entered phase I. Like Lesinurad, the indication is also Gout. The other two substances are being developed for indications within oncology
(liver and pancreas cancer). Both of these belong to a class of drugs named mitogen-activated erk kinase (mek) –
inhibitors. They are being developed together with Bayer Healthcare. Besides the welcome addition to AstraZeneca’s pipeline that Ardea brings, the pharma giant has communicated an intention to focus on a more flexible and creative research organization with many small units. The purchase of Ardea is clearly a step in that direction. However, the price tag of 8.4 billion sek is without doubt high. AstraZeneca will pay a premium of about 50 percent compared to Ardea’s share price during the 30-day period preceding the deal.
Future deals ahead
Ardea will probably not be the only acquisition by AstraZeneca during 2012. The company is currently looking at several other potential companies and drug candidates to further strengthen the development pipeline. Astra is not the only pharma giant that has been active within the m&a-field lately. Just days before the Astra-Ardea deal GlaxoSmithKline offered 2.6 billion us dollars for us biotech company Human Genome Sciences. But both Astra’s and Glaxo’s recent acquisitions are small in comparison to 2007 when AstraZeneca paid 15.2 billion usd for Medimune in one of the biggest biotech acquisitions ever. A price that was extremely high according to most industry analysts. g