AstraZeneca Announces $39 Billion Acquisition of Alexion Pharmaceuticals to Enter Rare Disease Market

Pharmaceutical Industry: Another Major Acquisition Underway.

Major Acquisition Completed

On December 13, AstraZeneca’s official website prominently announced that AstraZeneca and Alexion Pharmaceuticals had reached a final agreement on the acquisition of Alexion by AstraZeneca, with a total transaction value of $39 billion.

The boards of directors of both companies unanimously approved the acquisition. Subject to regulatory approvals and approval by the shareholders of both companies, the acquisition is expected to be completed in the third quarter of 2021. Upon completion, Alexion shareholders will hold approximately 15% of the shares in the combined company.

Pascal Soriot, CEO of AstraZeneca, stated: “Alexion has established its leadership in complement biology, delivering life-transforming benefits to patients with rare diseases. This acquisition enables us to strengthen our position in immunology. We look forward to welcoming our new colleagues from Alexion, allowing us to leverage our combined expertise in immunology and precision medicine to drive innovation and provide life-changing therapies to more patients.”

According to official website information, the two companies are jointly committed to science and innovation to deliver life-changing medicines. The combined capabilities of these two organizations will create a company with robust strength across various technology platforms, enabling it to bring innovative drugs to millions of people worldwide. The merged company will also expand its global reach, covering primary, specialty, and highly specialized care sectors.

Achieve double-digit growth

Data shows that AstraZeneca has established an expanding portfolio of scientific assets in oncology, cardiovascular, renal and metabolism, and respiratory diseases, with organ protection as a key focus. Furthermore, AstraZeneca has developed a broad range of technologies, initially focusing on small molecules and biologics, while increasingly emphasizing precision medicine, genomics, oligonucleotides, and epigenetics. Recently, AstraZeneca has intensified its efforts in immunology research and the development of therapeutics for immune-mediated diseases.

AstraZeneca’s acquisition of Alexion aims to leverage AZ’s robust commercial portfolio and strong product pipeline to support the latter’s long-term ambition to develop novel therapies in the field of immunology, where significant unmet medical needs remain. Indeed, Alexion has achieved rapid revenue growth in recent years, with revenues reaching $5 billion in 2019 (a year-on-year increase of 21%).

Furthermore, Alexion demonstrated exceptional commercialization capabilities in building its “blockbuster” C5 product portfolio. Within less than two years of launch in its key markets, including the United States, Japan, and Germany, over 70% of PNH patients successfully transitioned from Soliris to Ultomiris, underscoring the success of the franchise and the strong complementary role of Ultomiris across additional indications.

Rare diseases represent a high-growth therapeutic area characterized by rapid innovation and significant unmet medical needs. Currently, more than 7,000 rare diseases are known, yet only approximately 5% of patients have access to treatments approved by the U.S. Food and Drug Administration (FDA). The global rare disease market is projected to grow at a double-digit rate in the coming years.

AstraZeneca stated that this acquisition strengthens AstraZeneca’s leading position in the industry, leveraging its extensive portfolio of medicines to enable the new company to deliver innovative therapies to a broad range of healthcare professionals across primary, secondary, and highly specialized care settings.

Reshaping the Existing Landscape?

In fact, AstraZeneca is not the only multinational pharmaceutical giant that has shown interest in rare disease drug companies.

On January 8, 2019, Takeda Pharmaceutical Company announced the completion of its acquisition of Shire (hereinafter referred to as “Shire”), bringing this landmark deal in the pharmaceutical industry to a close. Shire is a biopharmaceutical company focused on the research, development, and production of medicines for rare diseases, with its headquarters in Dublin, Ireland.

According to estimates by research institutions at the time, the merged Takeda Pharmaceutical Company would achieve an annual total revenue exceeding US$30 billion, primarily driven by its core business segments in oncology, gastroenterology, neuroscience, rare diseases, and plasma-derived therapies (PDT). Upon completion of the acquisition, the company entered the top ten list of global multinational pharmaceutical giants.

In fact, according to the "2019 Report on the Accessibility of Rare Disease Drugs in China," very few rare disease drugs marketed by global leading pharmaceutical giants are available in China.

According to the global sales rankings of rare disease drugs, Takeda ranks first due to its successful acquisition of Shire, followed by Alexion, Novartis, Sanofi, and Roche in the top five, while AstraZeneca does not appear on the list.

According to IQVIA’s global pharmaceutical end-market sales data, the rare disease drug market in the United States has expanded rapidly over the past two decades, with sales contributions from non-rare disease indications far exceeding those from rare disease indications. In other words, orphan drug designation and the approval of rare disease indications have driven the expansion of rare disease drugs into common disease indications. It is understood that the rare disease drug market represents a case of market failure; from research and development and manufacturing to pricing and market access, the market struggles to provide sufficient incentive mechanisms to drive corporate development.

Going forward, Sibailan will monitor whether AstraZeneca’s entry—leveraging its strong commercialization capabilities—will reshape the current sales rankings among rare disease companies and further drive the development of the rare disease market.

Responsible Editor: Lulu Jun

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