The deal marks a further investment in cancer research and treatment, which accounts for about one-third of AstraZeneca’s business, as well as its continued push to expand in China.
AstraZeneca said on Tuesday it will buy Gracell Biotechnologies for up to $1.2 billion as the Anglo-Swedish pharma company furthers its cell therapy ambitions and boosts its presence in China, the world's second-largest pharmaceuticals market.
The cash deal, which adds several experimental therapies to AstraZeneca's portfolio, values Gracell at $2 per ordinary share, or $10 per American Depository Share, of Gracell, representing a premium of 61.6% from its last close on Dec. 22. Gracell will operate as a wholly-owned subsidiary of AstraZeneca, with operations in China and the U.S. AstraZeneca will also acquire the liquidity, Gracell's cash equivalents and short-term investments of $234,1 million as of September 30, 2023.
The deal will add several experimental therapies to AstraZeneca's portfolio. Gracell's CAR-T cell therapy works by extracting disease-fighting white blood cells known as T-cells from a patient, re-engineered to attack cancer and infused back into the body.
According to experts, the deal will help strengthen AstraZeneca's position in cell therapy, as it is currently not as heavily involved in the space like Novartis and Gilead.
The deal is expected to close in the first quarter of 2024.
This summer, it was reported that AstraZeneca was considering spinning off its local business, and listing it in Hong Kong or Shanghai, to avoid being caught up in the fallout from increasing tensions between China and the US and its allies. The company is not only trying to exploit a growing client base in China, but is increasingly striking deals with local firms that can expand its drug offerings in other markets.
Its acquisition of Gracell is AstraZeneca’s second tie-up with Chinese companies since the start of the year. In November, it struck a deal to develop a weight-loss pill with the Chinese biotech company Eccogene, and in August it announced a contract manufacturing deal with CanSino Biologics for its messenger RNA technology vaccine program.
