On December 14, 2020 Relay Therapeutics, Inc. (Nasdaq: RLAY), a clinical-stage precision medicine company transforming the drug discovery process by leveraging unparalleled insights into protein motion, reported it has entered into a worldwide license and collaboration agreement with Genentech, a member of the Roche Group, for the development and commercialization of RLY-1971, a potent inhibitor of SHP2 (Press release, Relay Therapeutics, DEC 14, 2020, View Source [SID1234572797]). Under the collaboration, Genentech will assume development of RLY-1971 with the potential to expand into multiple combination studies including with Genentech’s investigational inhibitor of KRAS G12C, GDC-6036.

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"RLY-1971 has the potential to serve as a backbone for combination therapy across numerous solid tumors and therefore represents an encouraging approach for cancer patients," said Sanjiv Patel, M.D., president and chief executive officer of Relay Therapeutics. "Roche and Genentech’s global footprint and deep expertise in oncology makes them the perfect partner for us to execute the broad development and commercialization of RLY-1971."

"Genentech has a longstanding commitment to understanding the underlying biology of KRAS, the most commonly mutated oncogene and an important driver of cancer growth," said James Sabry, M.D., Ph.D., global head of pharma partnering, Roche. "We are excited to partner with Relay Therapeutics, and we believe that the combination of KRAS G12C and SHP2 inhibitors together represents a promising approach that we hope could become a new treatment option for patients with KRAS G12C mutant tumors."

Under the terms of the agreement, Relay Therapeutics will receive $75 million in an upfront payment and is eligible to receive $25 million in additional near-term payments. Relay Therapeutics also has the right to opt in to a 50/50 U.S. profit/cost share on RLY-1971. If Relay elects to opt in, then Relay will be eligible to receive 50 percent of profits from U.S. sales and up to $410 million in additional ex-U.S. commercialization and sales-based milestone payments, as well as royalties on ex-U.S. net sales. If Relay Therapeutics elects not to opt in, then Relay will be eligible to receive up to $695 million in additional development, commercialization and sales-based milestones, as well as royalties on global net sales, anticipated to be in the low-to-mid-teens. In the event of regulatory approval of both RLY-1971 and GDC-6036 in combination, Relay Therapeutics is eligible to receive additional royalties. Relay Therapeutics retains the right to combine RLY-1971 with its selective FGFR2 and mutant-selective PI3Kα programs.

With the execution of this collaboration, Relay Therapeutics anticipates it will have cash and investments to sustain its operations through 2024.

Conference Call Information

Relay Therapeutics will host a live webcast today beginning at 8:00 a.m. ET to discuss the collaboration. To access the live call, please dial 1 (833) 540-1168 (domestic) or 1 (929) 517-0359 (international) and refer to conference ID 8792127. A webcast of the conference call will be available under "News and Presentations" in the Investors & Media section of Relay Therapeutics’ website at View Source The archived webcast will be available on Relay Therapeutics’ website approximately two hours after the conference call and will be available for 30 days following the call.

About RLY-1971

RLY-1971 is a potent small molecule inhibitor of Src homology region 2 domain-containing phosphatase-2 (SHP2). SHP2 is a critical signaling node and regulator that promotes cancer cell survival and growth through the RAS pathway, playing a key role in the way cancer cells develop resistance to targeted therapies. Preclinically, RLY-1971 demonstrated significant anti-tumor activity as a monotherapy in cancers with specific alterations as well as in combination with other anti-tumor agents, potentially overcoming or delaying the onset of resistance to those therapies. RLY-1971 is currently being evaluated in a first-in-human trial designed to treat patients with advanced or metastatic solid tumors. To learn more about the first-in-human clinical trial of RLY-1971, please visit here.

On December 14, 2020 3SBio Inc. ("3SBio")’s subsidiary, Sunshine Guojian Pharmaceutical (Shanghai) Co. Ltd. ("Sunshine Guojian") and Verseau Therapeutics, Inc. ("Verseau") reported the selection of a monoclonal antibody targeting VSIG4, as a licensed program under their partnership agreement focused on the development and commercialization of novel monoclonal antibodies in the field of immuno-oncology for a broad range of cancers (Press release, 3SBio, DEC 14, 2020, View Source [SID1234572834]). This is the second licensed program under the partnership agreement signed between the parties in 2019. The first licensed program was granted by Verseau to Sunshine Guojian for VTX-0811, a novel PSGL-1-targeted antibody in the field of immuno-oncology, on November 18, 2019.

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By targeting VSIG4, a type-I receptor from the B7-like family that is highly expressed on tumor-associated macrophages and dendritic cells across most tumor types, the antibody reprograms macrophages and dendritic cells to a pro-inflammatory state, activates T cells and attracts other immune cells to generate a coordinated and powerful antitumor response. Verseau’s anti-VSIG4 antibodies preclinically demonstrate a greater inflammatory response compared to current immunotherapies in both PD-1 responsive tumors and non-responsive tumors. VSIG4 is the second unblinded target from Verseau’s pipeline of macrophage checkpoint modulators (MCMs). Verseau’s MCMs reprogram macrophages to be more inflammatory or more tolerogenic depending on the disease context.

"Since entering into a collaboration with 3SBio in 2019, we have made significant progress toward our goal to expand the potential of immunotherapy by developing a pipeline of first-in-class macrophage checkpoint modulators across a broad range of cancer types," said Dr. Tanya Novobrantseva, Chief Scientific Officer of Verseau. "With the selection of a monoclonal antibody targeting VSIG4 as a licensed program under our partnership, we now have two programs in co-development with 3SBio Group’s subsidiary, Sunshine Guojian and look forward to continuing our relationship as we expand our pipeline of both partnered and proprietary programs."

"Early data in patient-derived primary tumors suggest that VSIG4 antibodies could generate a greater anti-tumor inflammatory response compared to current immunotherapies in both PD-1 responsive and non-responsive tumors," said Dr. Jing Lou, Chairman of 3SBio. "By partnering with Verseau we are now at the forefront of one of the most promising areas of innovation within immuno-oncology, and are making timely progress toward our goal of bringing novel cancer therapies to patients in China."

Under the terms of the agreement, Sunshine Guojian received an exclusive license to develop and commercialize a select number of MCM antibodies for all human oncology indications in Greater China, including mainland China, Taiwan, Hong Kong and Macau ("Territory"). Verseau retains global rights to all MCM programs outside of Greater China. Verseau is responsible for the discovery and optimization of MCM antibodies for each program. Sunshine Guojian will fund and conduct preclinical antibody development, GMP manufacturing, and commercialization in the Territory.

About VSIG4

VSIG4, a type-I receptor from the B7-like family, is highly expressed on tumor-associated macrophages and dendritic cells across most tumor types. The anti-VSIG4 antibody reprograms macrophages and dendritic cells to a pro-inflammatory state, activates T cells and attracts other immune cells to generate a coordinated and powerful antitumor response. In patient-derived primary tumors, Verseau’s VSIG4 antibodies demonstrate a greater inflammatory response compared to current immunotherapies in both PD-1 responsive and non-responsive tumor samples. VSIG4 is the second unblinded target from Verseau’s pipeline of macrophage checkpoint modulators (MCMs). Verseau’s MCMs reprogram macrophages to be more inflammatory or more tolerogenic depending on the disease context.

About Macrophage Checkpoint Modulators

Verseau is broadening the therapeutic potential of immunotherapy by developing macrophage checkpoint modulators (MCMs) that regulate the functional shift to make macrophages more inflammatory or more tolerogenic depending on the disease context. While many patients benefit from PD-1 inhibitor therapies, they are only effective in the ~25% of cancers that involve T cell infiltration. By targeting modulation of macrophages, which are present in ~75% of human cancers, Verseau aims to significantly expand the therapeutic benefit of immunotherapy. MCMs cause tumors to turn highly inflammatory and stimulate multiple immune cell types, including T cells. Verseau’s therapies have the potential to significantly expand the number of patients benefitting from immunotherapy, including those unresponsive to PD-1 inhibitor therapies. Through its proprietary all-human translational system Verseau has validated more than two dozen targets amenable to different therapeutic modalities, including monoclonal antibodies.

On December 13, 2020 TCR2 Therapeutics Inc. (Nasdaq: TCRR), a clinical-stage immunotherapy company with a pipeline of novel T cell therapies for patients suffering from cancer, reported positive interim data from the ongoing Phase 1 portion of the TC-210 ( gavocabtagene autoleucel or "gavo-cel") Phase 1/2 clinical trial for mesothelin-expressing solid tumors (Press release, TCR2 Therapeutics, DEC 13, 2020, View Source [SID1234572799]). As of the November 24, 2020 data cutoff, three PRs according to RECIST 1.1 criteria have been recorded among the first eight patients treated on study, with our first ovarian cancer patient having achieved a confirmed PR up to month six. In addition, the first patient treated at a higher gavo-cel dose (1×108/m2) without lymphodepletion achieved stable disease through two months without any significant toxicities, which has allowed patients to start treatment at that dose with the addition of lymphodepletion. The toxicity profile remains manageable with only two patients to date exhibiting gavo-cel-related non-hematologic grade >2 toxicity and no evidence of neurotoxicity or on-target, off-tumor toxicity. Translational data further demonstrated TRuC-T cell expansion and cytokine induction in all patients.

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"Although the focus of any Phase 1 trial is safety, the consistency in tumor regression and RECIST responses we have observed with gavo-cel as a single agent supports our belief in the advantages of TRuC-T cells over other cell therapies and the potential for a fundamentally new approach in the treatment of solid tumors," said Garry Menzel, Ph.D., President and Chief Executive Officer of TCR2 Therapeutics. "The HLA independence of our technology allows us to treat a broad population of patients with mesothelin surface expression while leveraging the full T cell receptor complex to drive enhanced trafficking, on-target killing and persistence in the hostile solid tumor microenvironment. Most important, we are delivering clinical and survival benefit to those patients with heavily pre-treated mesothelioma or ovarian cancer."

"The ability of gavo-cel to benefit patients who have become treatment refractory after having failed multiple lines of therapy, including immune checkpoint inhibitors and anti-mesothelin therapy, combined with its manageable safety profile is remarkable. The changes announced today to the Phase 1 trial design, reducing the intra-cohort safety observation periods to 14 days from 28 days, enable us to more rapidly identify the recommended Phase 2 dose and initiate the Phase 2 expansion trial where we will evaluate the efficacy of gavo-cel in four solid tumor indications. Importantly, in the Phase 2 we will explore the impact of gavo-cel retreatment and its combination with checkpoint inhibitor therapy which could further improve on the clinical benefit observed to date," said Alfonso Quintás-Cardama, M.D., Chief Medical Officer of TCR2 Therapeutics.

The primary objectives of the Phase 1 portion of the study are to define the safety profile of gavo-cel in patients whose tumors overexpress mesothelin and to determine the recommended Phase 2 dose (RP2D). Secondary objectives include ORR and disease control rate (DCR). Exploratory objectives include the assessment of expansion, tumor infiltration, and persistence of gavo-cel.

Summary of trial conduct, baseline characteristics and gavo-cel dose:

Safety Protocol: The new clinical trial protocol amendment allows the intra-cohort safety observation periods to be reduced to 14 days from 28 days, allowing the testing of a gavo-cel dose over a minimum of 56 days compared to the previous 84 days.
Screening: Forty-five percent of patients met the mesothelin expression cut-off as defined per protocol.
Manufacturing: Products meeting protocol defined specifications for gavo-cel have been manufactured successfully for each patient from whom apheresis material was sent into production.
Patient Characteristics: Eight patients received gavo-cel including seven with mesothelioma and one with ovarian cancer with a median age of 65 years (range, 36-84 years). The median number of prior therapies was 5.5 (range, 3-9), including immune checkpoint inhibitor therapy (n=6) and anti-mesothelin therapies (n=3).
Gavo-cel Dose: The eight patients disclosed to date have received gavo-cel at the following dose level (DL):
DL 0: 5×107 cells/m2 without lymphodepletion – 1 mesothelioma
DL 1: 5×107 cells/m2 following lymphodepletion – 5 mesothelioma and 1 ovarian cancer
DL 2: 1×108 cells/m2 without lymphodepletion – 1 mesothelioma
Key clinical findings from the first eight patients treated with gavo-cel:

Safety: Gavo-cel was generally well tolerated, with no patients experiencing neurotoxicity or on-target, off-tumor toxicities. Two (25%) patients experienced Cytokine Release Syndrome (CRS) grade 3, which was successfully managed with tocilizumab and corticosteroids.
Clinical Activity: All eight patients have had at least one disease response assessment. The DCR was 100%, with all patients experiencing tumor regression. The median decrease in the sum of diameters of target lesions was 43% (range, 5% to 75%). The ORR was 38% (2 confirmed and 1 unconfirmed PRs) according to RECIST v1.1 criteria, including one patient who achieved a complete metabolic response.
Translational Data: Peak gavo-cel expansion (Cmax) occurred between days 7 and 23. Cmax increased when gavo-cel was administered following lymphodepletion. The median peak gavo-cel expansion was 811.9 copies/µg of genomic DNA (range, 520 to 5,901 copies/µg). Cytokine induction post-gavo-cel infusion was observed in all evaluable patients, which is indicative of mesothelin target engagement.
About the Phase 1/2 Clinical Trial in Advanced Mesothelin-Expressing Solid Tumors

The Phase 1/2 clinical trial (NCT03907852) is evaluating the safety and efficacy of gavocabtagene autoleucel ("gavo-cel"; TC-210), TCR2’s T cell receptor fusion construct directed against mesothelin. The trial is enrolling patients with mesothelin expressing NSCLC, ovarian cancer, cholangiocarcinoma, and malignant pleural/peritoneal mesothelioma. The Phase 1 dose escalation portion of the clinical trial utilizes a modified 3+3 design with four increasing gavo-cel doses. At each dose, gavo-cel will be tested in two separate dose levels: first without lymphodepletion and then following lymphodepleting chemotherapy. The Phase 1 portion of the clinical trial is ongoing.

In the Phase 2 portion of the clinical trial, approximately 50 patients are planned to receive gavo-cel at the RP2D in four distinct cohorts according to their cancer diagnosis: NSCLC, ovarian cancer, malignant pleural/peritoneal mesothelioma and cholangiocarcinoma. Each cohort will include ten patients, except the NSCLC cohort which will include 20 patients with eight patients to receive gavo-cel as single agent and 12 patients to receive gavo-cel in combination with a programmed cell death 1 (PD-1) blocking antibody.

About Mesothelin-Expressing Solid Tumors

Mesothelin is a cell-surface glycoprotein highly expressed in a wide range of solid tumors, including malignant pleural/peritoneal mesothelioma, ovarian cancer, cholangiocarcinoma, breast cancer, pancreatic cancer and others. Overexpression of mesothelin is associated with poorer prognosis in some cancers due to its active role in both malignant transformation and tumor aggressiveness by promoting cancer cell proliferation, invasion, and metastasis. Of the wide range of solid tumors expressing mesothelin, non-small cell lung cancer, ovarian cancer, mesothelioma and cholangiocarcinoma represent a patient population up to 80,000 annually in the United States alone.

TCR2 Therapeutics Conference Call and Webcast

TCR2 Therapeutics will host a conference call and webcast on Monday, December 14th at 8:00am E.T. The webcast and presentation will be made available on the TCR2 Therapeutics website in the Investors section under Events at View Source Following the live audio webcast, a replay will be available on the Company’s website for approximately 30 days.

On December 13, 2020 Senhwa Biosciences, Inc. (TPEx: 6492), a clinical-stage biopharmaceutical company focused on next generation DNA Damage Response (DDR) therapeutics for the treatment of cancer, reported their Abstract on Cholangiocarcinoma treatment with Silmitasertib (CX-4945) has been accepted for oral/poster presentation at the upcoming American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Gastrointestinal Cancers Symposium (ASCO GI) in San Francisco, 15-17 January, 2021 (Press release, Senhwa Biosciences, DEC 13, 2020, View Source [SID1234572778]). Due to the COVID-19 pandemic, the event will be hosted virtually.

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Senhwa was invited to present positive topline results from their global phase II trial, evaluating the combination of Silmitasertib plus Gemcitabine/Cisplatin compared to Gemcitabine/Cisplatin alone in the frontline treatment of patients with Cholangiocarcinoma. The trial met its primary endpoint at a pre-specified interim analysis demonstrating a statistically significant and clinically meaningful improvement in progression-free survival (PFS) (P<0.05), and was stopped early because superior efficacy was demonstrated. PFS was assessed by an independent statistician.

The full abstract will be made available online via View Source at 5:00 PM (EST) on 11 January, 2021.

More details of the CCA Treatment Abstract at the 2021 ASCO (Free ASCO Whitepaper) GI Symposium:

Abstract Title: Silmitasertib (CX-4945) in combination with gemcitabine and cisplatin as first-line treatment for patients with locally advanced or metastatic cholangiocarcinoma: A phase Ib/II study.
Abstract Perm ID: 312
Session Title: Poster Highlights: Targeted Approaches and Multimodality
Session Date and Time: 1/17/2021, 2:30 PM-3:15 PM (PST)
About Silmitasertib

Silmitasertib is a first-in-class small molecule drug that targets CK2 and acts as a CK2-inhibitor. Silmitasertib is safe and well-tolerated in humans. To date, three Phase I trials of Silmitasertib in cancer patients have been completed; currently, there is one ongoing Phase I and two ongoing Phase II studies. In December 2016, Silmitasertib was granted Orphan Drug Designation by the U.S. FDA for the treatment of Cholangiocarcinoma. In July 2020, Silmitasertib was granted Rare Pediatric Disease Designation to treat Medulloblastoma by the U.S. FDA. An eIND was granted by the U.S. FDA on August 27, 2020, to Dr. Rayyan at BUMCP to treat a patient with severe COVID-19.

On December 12, 2020 AstraZeneca and Alexion Pharmaceuticals, Inc. (Alexion) reported that have entered into a definitive agreement for AstraZeneca to acquire Alexion(Press release, Alexion, DEC 12, 2020, View Source [SID1234572775]).

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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. Based on AstraZeneca’s reference average ADR price of $54.14, this implies total consideration to Alexion shareholders of $39bn or $175 per share.

The boards of directors of both companies have unanimously approved the acquisition. Subject to receipt of regulatory clearances and approval by shareholders of both companies, the acquisition is expected to close in Q3 2021, and upon completion, Alexion shareholders will own c.15% of the combined company.

Pascal Soriot, Chief Executive Officer, AstraZeneca, said: "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."

Ludwig Hantson, Ph.D., Chief Executive Officer, Alexion, said: "For nearly 30 years Alexion has worked to develop and deliver transformative medicines to patients around the world with rare and devastating diseases. I am incredibly proud of what our organisation has accomplished and am grateful to our employees for their contributions. 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 organisation will be well positioned to accelerate innovation and deliver enhanced value for our shareholders, patients and the rare disease communities."

Strategic rationale

Both companies share the same dedication to science and innovation to deliver life-changing medicines. The capabilities of both organisations will create a company with great strengths across a range of technology platforms, with the ability to bring innovative medicines to millions of people worldwide. The combined company will also have an enhanced global footprint and broad coverage across primary, speciality and highly specialised care.

Scientific leadership – accelerated presence in immunology

AstraZeneca has built a growing scientific presence in oncology, and in cardiovascular, renal and metabolism, and respiratory diseases, with a focus on organ protection. AstraZeneca has developed a broad range of technologies, initially focused on small molecules and biologics and with a growing focus in precision medicine, genomics, oligonucleotides and epigenetics. More recently, AstraZeneca has increased its efforts in immunology research and the development of medicines for immune-mediated diseases.

Alexion has pioneered complement inhibition for a broad spectrum of immune-mediated rare diseases caused by uncontrolled activation of the complement system, a vital part of the immune system. Alexion’s franchise includes Soliris (eculizumab), a first-in-class anti-complement component 5 (C5) monoclonal antibody. The medicine is approved in many countries for the treatment of patients with paroxysmal nocturnal haemoglobinuria (PNH), atypical haemolytic uremic syndrome, generalized myasthenia gravis and neuromyelitis optica spectrum disorder. More recently, Alexion launched Ultomiris (ravulizumab), a second-generation C5 monoclonal antibody with a more convenient dosing regimen.

Alexion’s immunology expertise extends to other targets in the complement cascade beyond C5 as well as additional modalities, with its deep pipeline including Factor D small-molecule inhibitors of the alternative pathway of the complement system, an antibody blocking neonatal Fc receptor (FcRn)-mediated recycling, and a bi-specific mini-body targeting C5, among others. The FcRn extends the half-life and hence the availability of pathogenic immunoglobulin G (IgG) antibodies.

AstraZeneca, with Alexion’s R&D team, will work to build on Alexion’s pipeline of 11 molecules across more than 20 clinical-development programmes across the spectrum of indications, in rare diseases and beyond.

Alexion’s leading expertise in complement biology will accelerate AstraZeneca’s growing presence in immunology. The acquisition adds a new technology platform to AstraZeneca’s science and innovation-driven strategy. The complement cascade is pivotal to the innate immune system. It plays a crucial role in many inflammatory and autoimmune diseases across multiple therapy areas, including haematology, nephrology, neurology, metabolic disorders, cardiology, ophthalmology and acute care. In contrast, AstraZeneca’s capabilities in genomics, precision medicine and oligonucleotides can be leveraged to develop medicines targeting less-frequent diseases. Combining AstraZeneca’s capabilities in precision medicine and Alexion’s expertise in rare-disease development and commercialisation will enable the new company to develop a portfolio of medicines addressing the large unmet needs of patients suffering from rare diseases.

The combined companies will bring together two rapidly converging, patient-centric models of care delivery with combined strengths in immunology, biologics, genomics and oligonucleotides to drive future medicine innovation. AstraZeneca intends to establish Boston, Massachusetts, US as its headquarters for rare diseases, capitalising on talent in the greater Boston area.

Industry-leading revenue growth; enhanced geographical presence and broad coverage across primary, specialised and highly specialised care

AstraZeneca’s acquisition of Alexion, with its strong commercial portfolio and robust pipeline, will support its long-term ambition to develop novel medicines in areas of immunology with high unmet medical needs. Alexion achieved impressive revenue growth over the last few years, with revenues of $5.0bn in 2019 (21% year-on-year growth). Alexion has exhibited skilful commercial execution in building its ‘blockbuster’ C5 franchise. The success of the franchise is demonstrated by the effective transition of over 70% of PNH patients from Soliris to Ultomiris in less than two years of launch in its key markets, including the US, Japan and Germany, as well as the strong pipeline of additional indications for Ultomiris.

Rare diseases is a high-growth therapy area with rapid innovation and significant unmet medical need. Over 7,000 rare diseases are known today, and only c.5% have US Food and Drug Administration-approved treatments.1 The global rare disease market is forecasted to grow by a low double digit percentage in the future.2

AstraZeneca intends to build on its geographical footprint and extensive emerging markets presence to accelerate the worldwide expansion of Alexion’s portfolio.

The two companies have been on converging paths, AstraZeneca expanding its presence from primary to speciality care, whereas Alexion has been progressing from ultra-orphan to orphan and speciality conditions.

The acquisition strengthens AstraZeneca’s industry-leading growth, underpinned by its broad portfolio of medicines, which will enable the new company to bring innovative medicines to a broad range of healthcare practitioners in primary, speciality and highly specialised care.

The combined company is expected to deliver double-digit average annual revenue growth through 2025.

Financial benefits

Enhanced revenue growth, operating margin and cash-flow generation

The acquisition is expected to improve the combined Group’s profitability, with the core operating margin significantly enhanced in the short term, and with continued expansion thereafter. This uplift is supported by increased scale and expected recurring run-rate pre-tax synergies of c.$500m per year from the combined Group (by end of the third year following completion of the acquisition). AstraZeneca expects to generate significant value from the acquisition by extending Alexion’s commercial reach through leveraging AstraZeneca’s global presence and accelerating the development of Alexion’s pipeline.

The acquisition also strengthens AstraZeneca’s cash-flow generation, providing additional flexibility to reinvest in R&D and rapid debt reduction, with an ambition to increase the dividend.

Immediately earnings-accretive and value-enhancing acquisition, in line with stated capital-allocation priorities

The acquisition is expected to deliver robust and sustainable accretion to AstraZeneca’s core earnings per share (EPS) from the outset, with double-digit percentage accretion anticipated in the first three years following the completion of the acquisition.

The acquisition of Alexion is consistent with AstraZeneca’s capital-allocation priorities. The combined company is expected to maintain a strong, investment-grade credit rating, and the acquisition supports AstraZeneca’s progressive dividend policy. The combination represents a significant step in AstraZeneca’s strategic and financial-growth plans.

Webinar and conference call

A webinar and conference call for investors and analysts will begin at 2:00 pm UK time today, please join 10-15 minutes prior to the scheduled start time.

UK: +44 203 481 5237
Sweden: +46 8 5052 0017
US: +1 301 715 8592

Webinar ID: 995 4603 8702
Password: 12121220

Click here for available international numbers.

The presentation will be available at astrazeneca.com before the call takes place, and replay details after the call.

Details of the acquisition

Key terms

The acquisition will be undertaken through a US statutory merger in which Alexion shareholders will receive $60 in cash and 2.1243 new AstraZeneca ADSs listed on the Nasdaq exchange for each of their Alexion shares. The cash and ADS consideration represents an c.45% premium to Alexion shareholders based on the closing stock price of Alexion on 11 December 2020 and a c.43% premium, based on the 30-day volume-weighted average closing stock price of $122.04 before this announcement. If they elect, Alexion shareholders may receive their allocation of AstraZeneca ADSs in the form of a corresponding number of ordinary shares of AstraZeneca in addition to the cash consideration.

Based on AstraZeneca’s reference average ADR price of $54.14, this implies total consideration to Alexion shareholders of $39bn or $175 per share.

Financing

To support the financing of the offer consideration, AstraZeneca has entered into a new committed $17.5bn bridge-financing facility, provided by Morgan Stanley, J.P. Morgan Securities plc and Goldman Sachs. The bridge-financing facility is available for an initial term of 12 months from the earlier of the date of completion of the acquisition and 12 December 2021 with up to two six-month extensions available at the discretion of AstraZeneca. The initial bridge financing facility is intended to cover the financing of the cash portion of the acquisition consideration and associated acquisition costs and to refinance the existing term loan and revolving credit facilities of Alexion. In due course, AstraZeneca intends to refinance the initial bridge-financing facility through a combination of new medium-term bank loan facilities, debt-capital market issuances and business cash flows.

The acquisition is expected to significantly enhance cash generation, which will support rapid debt reduction and overall deleveraging. AstraZeneca remains committed to maintaining a strong investment-grade credit rating. The dividend policy remains unchanged with a commitment to a progressive dividend policy; dividend cover is expected to be materially enhanced as a result of the acquisition.

Further information on synergies

The acquisition is expected to realise recurring run-rate pre-tax synergies of c.$500m per year from the combined Group, generated from commercial and manufacturing efficiencies as well as savings in central costs, with full run-rate expected to be achieved by end of the third year following completion of the acquisition.

To realise the total synergies, AstraZeneca expects to incur one-time cash costs of c.$650m, during the first three years following completion.

Management and employees

Members of Alexion’s current senior management team will lead the future rare-disease activities. Under the terms of the acquisition agreement, AstraZeneca has agreed that for 12 months following closing, it will provide the Alexion employees with the same level of salary as such employees had before closing, incentive compensation opportunities that are in the aggregate no less favourable than those provided before closing and substantially comparable benefits to those provided before closing.

Governance

The companies will mutually agree on two individuals from the Alexion board of directors who will join the AstraZeneca board as directors upon closing of the acquisition.

Closing conditions

Closing of the acquisition is subject to approval by AstraZeneca and Alexion shareholders, certain regulatory approvals, approval of the new AstraZeneca shares for listing with the Financial Conduct Authority and to trading on the London Stock Exchange, and other customary closing conditions.

The acquisition is a Class 1 transaction for AstraZeneca and as such, will require the approval of its shareholders to comply with the UK Listing Rules. A shareholder circular, together with notice of the relevant shareholder meeting, will be distributed to shareholders in the first half of 2021. The Alexion proxy statement is also expected to be published in the first half of 2021.

Subject to the satisfaction of the closing conditions to the proposed acquisition, the companies expect the acquisition to close in Q3 2021.

Termination

The acquisition terms provide that Alexion will be liable to pay a break fee of up to $1.2bn to AstraZeneca in certain specified circumstances (including a change of Alexion’s board recommendation or completion of an alternative acquisition). AstraZeneca will also be required to pay Alexion a break fee of $1.4bn in certain specified circumstances, including a change of AstraZeneca’s board recommendation.

Recommendation

The boards of directors of both Alexion and AstraZeneca have unanimously approved the proposed acquisition and resolved to recommend that their respective shareholders vote in favour of it.

Advisors to AstraZeneca

Evercore Partners International LLP ("Evercore"), and Centerview Partners UK LLP ("Centerview Partners") are acting as lead financial advisers. Ondra LLP ("Ondra") are providing advice as part of their ongoing financial advisory services. Morgan Stanley & Co. International plc ("Morgan Stanley") and Morgan Stanley Bank International Limited and J.P. Morgan are acting as financial advisors and lead debt financing underwriters. Goldman Sachs Bank USA is acting as lead debt financing underwriter. Morgan Stanley and Goldman Sachs International are joint corporate brokers. Evercore is acting as sponsor in relation to the transaction described in this announcement. Freshfields Bruckhaus Deringer is acting as legal counsel.

Advisors to Alexion

Bank of America Securities is serving as financial advisor to Alexion, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel.