AstraZeneca makes $1.8bn move for US blood pressure drug maker CinCor as pharma giant expands heart and kidney portfolio
- The biotechnology business said that it would spend around $1.3bn upfront
- Astra exec: ‘Acquiring CinCor supports our commitment to cardiorenal disease’
- CinCor shares plunged in November following an unsuccessful Baxdrostat trial
AstraZeneca has agreed to acquire pharmaceutical group CinCor Pharma in a deal worth a potential $1.8billion (£1.5billion), to enhance its heart and kidney drugs portfolio.
The biotechnology giant said that it would spend around $1.3billion, or $26 per share, upfront taking over the Massachusetts-based business, representing a premium of 121 per cent to the stock’s closing price last Friday.
A further $10 per share will be paid out to investors dependent on the approval a particular regulatory submission for Baxdrostat, a blood pressure and cardiorenal condition treatment.
Takeover: AstraZeneca has agreed to acquire Massachusetts-based pharmaceutical group CinCor Pharma in a deal worth a potential $1.8billion
In early November, the results of a phase two trial published in the New England Journal of Medicine showed that the drug notably reduced hypertension among patients resistant to other medicines.
It achieved this by limiting the development of aldosterone, a hormone used to regulate a body’s salt content, in a subject’s urine and blood.
However, results from a separate study published three weeks later found that Baxdrostat did not significantly lower blood pressure when measured against a placebo.
This caused CinCor’s shares to plummet by nearly half in one day. They remain just over a quarter below the company’s initial public offering price of $16 per share in January 2022.
In total, London-listed AstraZeneca’s bid for CinCor is worth approximately 206 per cent of the latter’s closing share price on Friday.
Another two Baxdrostat treatment trials are currently taking place, while a further Phase III investigation is set to begin sometime during the first half of this year.
AstraZeneca said it would eventually hope to combine the drug with Farxiga, one of its most popular-selling medicines and commonly used to treat Type 2 diabetes and heart failure.
Mene Pangalos, the firm’s executive vice-president of biopharmaceuticals research and development, said: ‘Acquiring CinCor supports our commitment to cardiorenal disease and further strengthens our pipeline with baxdrostat.
‘Excess levels of aldosterone are associated with hypertension and several cardiorenal diseases, including chronic kidney disease and coronary artery disease and being able to effectively reduce this would offer a much-needed treatment option for these patients.’
AstraZeneca shares were 1 per cent lower at 11,668p during early trading on Monday, although their value has grown by about 40 per cent in the past 12 months.
The FTSE 100 group’s latest deal comes at the start of the JP Morgan Healthcare conference in California, the world’s biggest annual healthcare investment industry gathering, which is being held in-person for the first time in three years.
Analysts are predicting a flurry of pharmaceutical sector deals in 2023, given the relative underperformance of many biotech shares over the past year.
Victoria Scholar, Interactive Investor’s head of investment, added that with the poorer global economic outlook, ‘investors are more risk averse, looking towards defensive sectors such as pharmaceuticals to weather the downturn.’