AstraZeneca plc AZN confirmed, in response to a speculation, that it is exploring strategic options with Acerta Pharma BV. On Dec 11, 2015, the Wall Street Journal had reported that AstraZeneca is in advanced talks to acquire a privately-held Dutch biotech company, Acerta, in a deal worth more than $5 billion.
Why is AstraZeneca Interested?
Acerta is a clinical-stage biotech company focused on the development of treatment for cancer and autoimmune diseases. Acerta’s lead pipeline candidate, acalabrutinib (ACP-196) – a Bruton’s tyrosine kinase inhibitor, is being developed for multiple hematologic malignancies and solid tumors, as well as rheumatoid arthritis.
Earlier this month, Acerta announced that data from a phase I/II study on acalabrutinib was published in the New England Journal of Medicine. Data demonstrated an encouraging overall response rate of 95% at a median follow-up of 14.3 months in patients with relapsed chronic lymphocytic leukemia. Apart from acalabrutinib, the company also has ACP-319, a PI3k delta inhibitor in its pipeline.
Several studies are currently underway evaluating acalabrutinib alone and in combination with other treatments including Keytruda, Gazyva, Imbruvica and others.
Of late, AstraZeneca has been looking to build its portfolio and pipeline with strategic licensing and acquisition deals. Last month, the company announced that it is set to acquire California-based biotech company, ZS Pharma, Inc. ZSPH, for about $2.7 billion, to boost its cardiovascular and metabolic disease portfolio and pipeline. The deal is slated to close by 2015-end.
Moreover, considering that several products in the company’s portfolio are facing generic competition, the company needs to expedite the development of its pipeline.
Currently, AstraZeneca expects its oncology business to become the sixth growth platform after its five other growth platforms – Brilinta/Brilique, diabetes, respiratory, emerging markets and Japan. The company is aiming to bring six new cancer medicines to the market by 2020.
Recently, the company gained accelerated approval in the U.S. for Tagrisso, for the treatment of patients with metastatic EGFR T790M mutation-positive non-small cell lung cancer, as detected by an FDA-approved test, and who have progressed on or after EGFR tyrosine kinase inhibitor therapy.
We expect investor focus to remain on further updates regarding the potential acquisition.
AstraZeneca is a Zacks Rank #3 (Hold) stock. A couple of better-ranked stocks in the health care sector are Achillion Pharmaceuticals, Inc. ACHN and Mylan N.V. MYL. Both stocks carry a Zacks Rank #1 (Strong Buy).
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