AstraZeneca buys Pfizer gene therapy portfolio for $1bn as profits soar

AstraZeneca’s rare disease division has agreed to buy an early-stage gene therapy portfolio from drugmaking rival Pfizer for up to $1billion.

The deal’s announcement came as the group’s first-half operating profit jumped more than threefold to $5billion on the back of higher sales margins, lower sales costs and modest growth in research development expenses. 

Under the deal, expected to close in the third quarter, Alexion Pharmaceuticals will gain access to novel adeno-associated virus (AAV) capsids that are shown to be vital tools in gene therapy and gene editing.

Around 80 per cent of the world’s known rare diseases – defined by the European Union as a condition affecting fewer than 1 in 2,000 people – are thought to be caused by a genetic mutation.

Acquisition: AstraZeneca’s rare disease division, Alexion, has agreed to buy an early-stage gene therapy portfolio from drugmaking giant Pfizer for up to $1billion

Yet under 10 per cent currently have at least one approved treatment, or ‘orphan therapy,’ according to the US Food and Drug Administration,

AstraZeneca’s £29billion acquisition of Massachussetts-based Alexion almost exactly two years ago marked its entry into the rare disease field.

It was the pharmaceutical industry’s biggest takeover deal since the coronavirus pandemic started and has since been complemented by the $68million takeover of LogicBio.

Marc Dunoyer, chief executive of Alexion, said: ‘Today’s announcement represents another major step forward in Alexion and AstraZeneca’s ambition to be an industry leader in genomic medicine, which has potential to be transformative and even curative for patients with devastating diseases.

‘We look forward to continuing our work to develop enhanced platforms and technologies with broad therapeutic application while integrating best-in-class expertise to accelerate promising therapeutics into the clinic.’

AstraZeneca revenues grew by 4 per cent on a constant exchange rate basis to $22.3billion in the first six months of its financial year.

Excluding Covid-related sales, which have collapsed, turnover shot up by 16 per cent, boosted by solid demand for oncology, cardiovascular, renal and metabolism drugs.

Revenues from its most popular-selling treatment, Tagrisso, which targets non-small cell lung cancer, rose by 12 per cent to $2.9billion, while they increased by 39 per cent for Type 2 diabetes drug Farxiga.

Much higher sales margins, combined with lower sales costs and modest growth in research development expenses, helped the company’s operating profit soar more than threefold to $5billion.

Tthe group has upheld its full-year guidance on turnover and core earnings per share.

Sheena Berry, an equity research analyst at Quilter Cheviot, noted the FTSE 100 business has a ‘busy and strong’ pipeline of medicines under development.

She said: ‘AstraZeneca has initiated nine pivotal trials so far this year and remains on track to start 30 over the course of the year. This impressive pipeline will be complemented by the plan to buy Pfizer’s early-stage portfolio of gene therapies.’

AstraZeneca shares were 4.1 per cent, or 440p, up at £111.40 on Friday morning and have expanded by around 91 per cent in the past five years.

This post first appeared on Dailymail.co.uk