Alexion Pharmaceuticals is acquiring Achillion Pharmaceuticals for $930 million, a deal that could strengthen its position providing treatments for a rare blood disorder.
According to financial terms announced Wednesday, Boston-based Alexion (NASDAQ: ALXN) will pay $6.30 per share of Achillion (NASDAQ: ACHN) stock, which is an 80 percent premium to Achillion’s closing stock price on Tuesday. The deal could potentially pay Achillion shareholders more if the company’s clinical-stage drugs hit clinical and regulatory milestones.
Acquiring Blue Bell, PA-based Achillion gives Alexion another drug for paroxysmal nocturnal hemoglobinuria (PNH). The disease is caused when dysfunction in the complement system—a part of the immune system—destroys red blood cells, leading to blood clots and organ failure. Alexion’s franchise drug, eculizumab (Soliris), treats that disease by blocking a complement system protein called C5. At more than $500,000 a year, the intravenous infusion is one of the most expensive drugs on the market. Sales of eculizumab for PNH and two other rare diseases generated more than $3.5 billion in revenue in 2018. Alexion also has another FDA-approved PNH therapy, the antibody drug ravulizumab (Ultomiris).
Achillion aims to treat PNH, but in a different way and with a more patient-friendly formulation. The company’s lead drug candidate, danicopan (formerly known as ACH-4471), blocks a complement system protein called Factor D. The drug comes in pill form and is currently in Phase 2 testing. In a prepared statement, Alexion CEO Ludwig Hantson said that blocking Factor D production addresses the pathway causing disease while leaving the rest of the complement system intact to fight infection. He added that Achillion’s approach could help patients who have diseases that can’t be treated by blocking the C5 protein.
For Achillion, the deal puts its drug candidates in the hands of a company that has experience developing complement system disorder therapies, as well as the financial resources to pay for clinical development. In 2018 and in early 2019, Achillion announced corporate restructuring plans that trimmed headcount in order to save cash for its lead drug candidates. Under terms of the acquisition agreement, Alexion will pay Achillion shareholders an additional $1 per share if danicopan wins FDA approval. Shareholders will receive an additional $1 per share if another one of its drug candidates, ACH-5228, starts Phase 3 testing. ACH-5228, the company’s second-generation oral treatment that blocks Factor D, is currently in Phase 1 testing.
Alexion’s bid for Achillion comes as other companies strike deals for complement system drugs. Last week, Belgian pharmaceuticals giant UCB agreed to pay $2.1 billion to buy Ra Pharmaceuticals (NASDAQ: RARX), a Cambridge, MA-based company developing a pill for generalized myasthenia gravis, a complement system disorder that leads to muscle weakness. Alexion’s eculizumab is also approved to treat that disease.
The Achillion acquisition still needs shareholder and regulatory approval. Alexion and Achillion expect to complete the acquisition in the first half of 2020.