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AstraZeneca acquires ZS Pharma for $2.7bn, announces Q3 results

Published on 06/11/15 at 10:08am
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AstraZeneca has announced its acquisition of ZS Pharma for an all-cash total of $2.7 billion.

In the latest mega-money deal in a record-breaking year for the pharma sector, AstraZeneca gains access to San Mateo, California-based ZS’s proprietary ion­-trap technology to develop novel treatments for hyperkalaemia, or dangerously high potassium levels.

AstraZeneca will also get access to ZS’s potassium-binding compound ZS-9, a potential best-in-class treatment for hyperkalaemia, which is currently under regulatory review by the US FDA and targeted for release in May 2016. A submission for European Marketing Application Authorisation is planned by the end of 2015 and the company believes global sales could top $1 billion a year.

ZS Pharma has been coveted by pharma companies over the past few months and has been the subject of a recent bid from Actelion in September. But the British firm has trumped other rivals.

AZ said ZS Pharmas’ pipeline is a strong strategic fit with its own and complements its portfolio in cardiovascular and metabolic disease, one of AZ’s three main therapeutic areas. Pascal Soriot, chief executive of AstraZeneca, comments: “Hyperkalaemia can be a life-threatening condition for patients with chronic kidney disease and chronic heart failure, however the risk is under-appreciated and prevalence is increasing.

“This acquisition complements our strategic focus on cardiovascular and metabolic disease by adding a potential best-in-class treatment to our portfolio of innovative medicines. We look forward to welcoming the ZS Pharma team to AstraZeneca.”

Upon completion of the deal, ZS, which has around 200 employees across three sites in California, Texas and Colorado, will become a wholly owned subsidiary of AstraZeneca.

Robert Alexander, chief executive, ZS Pharma, says: “This agreement will allow us to maximise the potential of ZS-9, drawing on AstraZeneca’s long-standing expertise in developing and commercialising medicines for cardiovascular and metabolic diseases. We look forward to joining AstraZeneca and to working together to bring this important treatment for hyperkalaemia to the global market, helping to meet an important unmet medical need for patients.”

Q3 results

The acquisition announcement came alongside that of AZ’s third-quarter results for 2015, which saw revenues fell 10% to $5.95 billion. However at a constant exchange rate, they remained stable at $18.3 billion for the year to-date.

Despite the tough times, caused in part by increased generic competition to the blockbuster heartburn drug Nexium (esomeprazole) from February, AstraZeneca raised its full-year guidance. The company says it expects revenues to be in line with last year’s, and pointed to the strength of its pipeline to deliver future growth, noting the Q1 2016 regulatory decisions on the lung cancer candidate AZD9291

Pascal Soriot did however accept that 2016 would be a crucial and challenging year for the company in its quest to return to growth, not least due to the patent expiry of Crestor (rosuvastatin) in the US.

He says: “I’m pleased with our continued progress as we focus on executing our plans across our growth platforms and pipeline. While we have more work to do on the submission of saxagliptin/dapagliflozin combination in diabetes, the significant label update for Brilinta was accompanied by submission acceptances and accelerated reviews in cancer, respiratory diseases and lupus. In particular, our exciting oncology portfolio maintained its momentum with four Priority Review and Fast Track designations as well as supportive data at key congresses.

“Our financial performance in the year to date underpinned today’s upgrade to full-year guidance. 2016 will be a pivotal year in our strategic journey as we face the impact of loss of exclusivity to Crestor in the US. Looking ahead however, the continued performance of our growth platforms and upcoming launches will combine with our increasing focus on costs and cash generation to help offset short-term headwinds and return AstraZeneca to sustainable growth.”

Joel Levy

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