AstraZeneca to Acquire Gracell Biotechnologies for $1.2 Billion to Bolster Cell Therapy Pipeline

AstraZeneca has signed a definitive agreement for the acquisition proposal of Gracell Biotechnologies Inc. (NASDAQ: GRCL; "Gracell Bio"), further deepening AstraZeneca's presence in the cell therapy field. Gracell Bio is a global, clinical-stage biopharmaceutical company dedicated to developing innovative cell therapies for the treatment of cancer and autoimmune diseases.

The proposed acquisition will add GC012F CAR-T cell therapy to AstraZeneca's expanding cell therapy pipeline. GC012F, built on the FasTCAR technology platform, is an innovative BCMA/CD19 dual-target autologous chimeric antigen receptor T-cell therapy (CAR-T) currently in clinical stages. It holds promise as a next-generation treatment for multiple myeloma, various other malignant hematological tumors, and autoimmune diseases, including systemic lupus erythematosus (SLE).

The principle of autologous CAR-T cell therapy is to reprogram and modify the patient's own immune T cells to target and attack pathogenic cells for disease treatment. The production process is relatively complex and time-consuming. Gracell’s FasTCAR next-day production technology platform not only significantly reduces production time but also enhances the health status of T cells, potentially improving the effectiveness of autologous CAR-T therapy. This technology also holds promise for future application in treating rare diseases.

It is reported that Gracell will continue to operate in China and the United States as a wholly-owned subsidiary of AstraZeneca.

Transaction Consideration

According to the final terms of the agreement, AstraZeneca will acquire all diluted shares of Gracell Biotechnologies (including all shares represented by ADS). At the closing of the transaction, AstraZeneca will complete the acquisition at a cash price of $2.00 per common share ("Common Stock") (equivalent to $10.00 per ADS). In addition, the terms include a non-tradable contingent value right, under which AstraZeneca will pay a cash price of $0.30 per common share (equivalent to $1.50 per ADS) upon achieving specific regulatory-related milestones.

The transaction value of the cash upfront portion of the deal is approximately $1 billion, representing a 62% premium over Gracell's closing price on December 22, 2023, and a 154% premium over the 60-day Volume Weighted Average Price (VWAP) of $3.94 prior to the announcement. If the upfront payment and potential contingent value payments are achieved, the total transaction value would be approximately $1.2 billion, reflecting an 86% premium over Gracell’s closing price on December 22, 2023, and a 192% premium over the 60-day VWAP. As part of the proposed transaction, AstraZeneca will acquire the remaining cash, cash equivalents, and short-term investments on Gracell’s balance sheet. As of September 30, 2023, the total cash, cash equivalents, and short-term investments on Gracell’s balance sheet amounted to $234.1 million.

The transaction is expected to close in the first quarter of 2024, subject to customary closing conditions, including regulatory approvals and the approval of Gracell’s shareholders. The transaction does not impact AstraZeneca's financial guidance for the fiscal year 2023.

About GC012F

GC012F is a BCMA/CD19 dual-target autologous CAR-T cell therapy produced on Gracell’s FasTCAR technology platform, which is expected to bring transformative, safer, and more durable efficacy for the treatment of cancer and autoimmune diseases. Currently, multiple clinical studies of GC012F are underway, covering various hematologic malignancies and autoimmune diseases. Gracell has initiated a Phase 1b/2 clinical trial in the United States to evaluate GC012F for the treatment of relapsed/refractory multiple myeloma (RRMM).

Editor: Muyan

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