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May 6, 2015

Alexion to Acquire Synageva for $8.4 billion

  • Alexion Pharmaceuticals plans to acquire Synageva BioPharma for $8.4 billion, the companies said today, in a deal that will expand the buyer’s portfolio of metabolic treatments with what it boasted will be “the most robust rare disease pipeline in biotech.”

    That pipeline will include Synageva’s Kanuma™ (sebelipase alfa), an enzyme replacement therapy for lysosomal acid lipase (LAL) deficiency, for which regulatory decisions are expected later this year from the FDA and the European Commission.

    A recombinant form of the human LAL enzyme, Kanuma has been granted the FDA’s Breakthrough Therapy Designation for LAL deficiency in infants, and is under priority review by the agency. In Europe, Kanuma has been given accelerated assessment of its Marketing Authorization Application by the European Medicines Agency (EMA). The EMA, the FDA, and Japan’s Ministry of Health, Labour and Welfare (MHLW) have granted Kanuma their orphan drug designations.

    “As Kanuma moves closer toward patients who suffer from LAL deficiency, and the other pipeline programs continue to progress, I am confident that this transaction will help continue to improve the lives of patients with LAL deficiency and other devastating, rare diseases for years to come,” Sanj K. Patel, Synageva’s president and CEO, said in a statement. “Alexion is uniquely suited to advance Synageva’s mission to deliver life-saving therapies to patients whose diseases were once considered too rare for developing treatments.”

    Kanuma is one of two Synageva-developed treatments expected that Alexion expects to launch this year. The other is Strensiq™ (asfotase alfa), a first-in-class enzyme replacement therapy intended to address the underlying cause of hypophosphatasia (HPP). Strensiq is designed to restore the genetically defective metabolic process, thus preventing or reversing potentially life-threatening complications of lifelong dysregulated mineral metabolism.

    The FDA has also granted Breakthrough Therapy designation for Strensiq, and accepted the company’s Biologics License Application (BLA) for Priority Review. Alexion has an MAA pending with the EMA for Strensiq, and has submitted an NDA for Strensiq to MHLW.

    Alexion expects Strensiq and Kanuma to join a portfolio of rare-disease treatments anchored by Soliris® (eculizumab), a first-in-class terminal complement inhibitor. Soliris is approved in the U.S., Europe, Japan, and elsewhere as the first and only treatment for patients with both paroxysmal nocturnal hemoglobinuria (PNH) to reduce hemolysis, and the first and only treatment for patients with atypical hemolytic uremic syndrome to inhibit complement-mediated thrombotic microangiopathy or TMA.

    Soliris generated more than $2 billion in revenues last year.

    Alexion is expanding at a time when other rare-disease drug developers have grown through mergers and acquisitions. Shire acquired NPS Pharmaceuticals for $5.2 billion in January, while Teva Pharmaceutical Industries snapped up Auspex Pharmaceuticals in March for $3.5 billion.

    The Synageva acquisition will expand Alexion’s pipeline to eight product candidates in clinical trials for eleven indications. The programs include Synageva’s SBC-103, an enzyme replacement therapy in an ongoing Phase I/II trial for mucopolysaccharidosis IIIB (MPS IIIB). SBC-103 won the FDA’s Fast Track in January.

    The deal will also give Alexion more than 30 preclinical programs, including 12 from Synageva’s drug discovery platform. Alexion expects at least four preclinical candidates to begin clinical trials by the end of 2016.

    Synageva also brings to Alexion its expression platform manufacturing technology—a system of vectors designed for producing proteins with human-like glycosylation patterns—and three upstream manufacturing facilities.

    Alexion plans to acquire all outstanding shares of Synageva common stock through an exchange offer, followed by a second-step merger. Alexion will exchange each Synageva share for $115 cash and 0.6581 shares of Alexion stock. The stock portion of the deal is expected to be tax-free to Synageva stockholders.

    The deal is subject to customary closing conditions, the tender of a majority of the outstanding shares of Synageva common stock and receipt of required regulatory approval. The transaction is expected to close mid-2015.

    In certain unspecified circumstances, the companies said, Alexion can carry out a one-step merger through a vote of Synageva stockholders.

    Shareholders of Synageva, including affiliates of Baker Brothers Investments, have agreed to exchange about 33.5% of Synageva’s outstanding shares with Alexion, which has received $3.5 billion in financing from Bank of America Merrill Lynch and J.P. Morgan in connection with the deal.

    Also as part of the deal, the companies said, Synageva Chairman Felix Baker, Ph.D. will join Alexion’s Board of Directors.

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