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Alexion Pharma Shares Jump 30% on AstraZeneca's $39 Billion Buyout Offer

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Shares of Alexion Pharmaceuticals reached a new 52-week high after the company reported it entered into a definitive agreement to be acquired by AstraZeneca in a combination cash and stock deal valued at US$39 billion.

Over the weekend, biopharmaceutical company Alexion Pharmaceuticals Inc. (ALXN:NASDAQ) and global pharmaceutical company AstraZeneca Plc (AZN:NYSE; AZN:LON) announced that they have entered into a definitive agreement whereby oncology, cardiovascular, renal & metabolic and respiratory disease-focused AstraZeneca will acquire Alexion, which concentrates its efforts on developing therapeutics for rare diseases.

The firms reported that under the terms of the agreement, "Alexion shareholders will receive $60 in cash and 2.1243 AstraZeneca American Depositary Shares (ADSs) (each ADS representing one-half of one (1/2) ordinary share of AstraZeneca, as evidenced by American Depositary Receipts (ADRs)) for each Alexion share." The company noted that the acquisition is estimated to be valued at US$39 billion, or $175 per share based upon the average price of AstraZeneca's ADR shares of $54.14.

According to the news release, each of the companies respective boards of directors have already unanimously approved the acquisition, which is expected to close in Q3/21. The firms stated that the deal remains subject to customary closing conditions, various regulatory and exchange approvals and final approval by the shareholders of each of the companies. The report advised that when the transaction is finalized current Alexion shareholders will own 15% of the equity in the combined company.

AstraZeneca's CEO Pascal Soriot remarked, "Alexion has established itself as a leader in complement biology, bringing life-changing benefits to patients with rare diseases. This acquisition allows us to enhance our presence in immunology. We look forward to welcoming our new colleagues at Alexion so that we can together build on our combined expertise in immunology and precision medicines to drive innovation that delivers life-changing medicines for more patients."

Alexion Pharmaceuticals' CEO Ludwig Hantson, Ph.D., commented, "For nearly 30 years Alexion has worked to develop and deliver transformative medicines to patients around the world with rare and devastating diseases...This transaction marks the start of an exciting new chapter for Alexion. We bring to AstraZeneca a strong portfolio, innovative rare disease pipeline, a talented global workforce and strong manufacturing capabilities in biologics. We remain committed to continuing to serve the patients who rely on our medicines and firmly believe the combined organization will be well positioned to accelerate innovation and deliver enhanced value for our shareholders, patients and the rare disease communities."

The companies stated the merger will serve to create a worldwide company with great strengths over a range of technology platforms across primary, specialty and highly specialized care and accelerate AstraZeneca's global presence in the area of immunology. The company's core market strengths to date have been in oncology, respiratory and in cardiovascular, renal and metabolism diseases centered around organ protection.

Alexion's has developed medicines for "a broad spectrum of immune-mediated rare diseases caused by uncontrolled activation of the complement system, a vital part of the immune system." The company's products include several monoclonal antibodies including Soliris (eculizumab) and Ultomiris (ravulizumab).

Post merger, the companies indicated that AstraZeneca plans to work closely with Alexion's R&D team to build upon and expand Alexion's current pipeline of 11 molecules, which have been studied in greater than 20 clinical development programs across a wide spectrum of rare diseases. AstraZeneca noted that it intends to establish its U.S. headquarters for rare diseases in Boston, Mass., to take advantage of the vast talent pool in the city and noted that members of Alexion's current senior management team will lead the future rare-disease activities.

Alexion started the day with a market cap of around $26.5 billion with approximately 218.8 million shares outstanding and a short interest of about 1.9%. ALXN shares opened 30% higher today at $157.35 (+$36.37, +30.06%) over Friday's $120.98 closing price and reached a new 52-week high price this morning of $160.03. The stock has traded today between $156.16 and $160.03 per share and is currently trading at $157.30 (+$36.32, +30.02%).

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