WILMINGTON, Del.—AstraZeneca and San Diego-based ArdeaBiosciences, Inc. have entered into a definitive merger agreement by whichAstraZeneca will acquire Ardea for $32 per share, for an aggregate total ofapproximately $1.26 billion, net existing cash. The offer represents a 54percent premium on the company's closing price on April 20. The boards ofdirectors of both companies have unanimously approved the terms of theagreement, and Ardea's board has recommended that its shareholders approve theacquisition. Select of the company's shareholders representing roughly 30percent of Ardea's outstanding shares have entered into a voting agreement withAstraZeneca in favor of the transaction.
The acquisition nets AstraZeneca a handful of productcandidates, including lesinurad, Ardea's treatment for the management ofhyperuricemia in patients with gout, a buildup of uric acid in the blood streamthat leads to chronic joint pain. The drug candidate is currently in phase IIIdevelopment. Because it is at such an advanced stage of development, it might be a good candidate to offset at least some of the losses when two of AstraZeneca's most successful drugs,Nexium and Seroquel, lose patent protection in 2014.
Lesinurad is a selective inhibitor of URAT1, a transporterfound in the proximal tubule cells of the kidney responsible for regulating theexcretion of uric acid. The drug candidate is being developed as an oral,once-daily treatment for the management of hyperuricemia in gout patients. Inits current Phase III program, it is being studied as an add-on treatment toallopurinol, which also treats hyperuricemia, in patients who are failing toreach target serum uric acid levels on allopurinol alone. Lesinurad is alsobeing tested as a monotherapy and as an add-on treatment to febuxostat inpatients suffering from tophaceous gout.
As Bloomberg noted in an article about the deal, citing Elmar Kraus, an analyst with DZ Bank AG in Frankfurt, "A phase III drug is always a good buyingargument for a pharma company, even if gout is not one of the majorindications."
Savvas Neophytou, pharmaceuticals analyst atPanmure Gordon, called the deal "consistent with[AstraZeneca] management strategy although the target indication of the lead productcandidate is gout, which has not, traditionally, been an easy target for drugdevelopment."
Easy indication or not, as it happens, gout seems to be a more active market recently. Takeda Pharmaceutical Co. announced April 11 an agreement to buy URL Pharma Inc. for $800 million to gain a new gouttreatment; Savient Pharmaceuticals Inc. makes Krystexxa for refractory chronic gout; and the U.S. Food and Drug Administration is reviewing Regeneron Pharmaceuticals Inc.'s Arcalyst injection for prevention ofgout flare-ups in patients initiating uric acid-lowering therapy.
"We are delighted to be joining AstraZeneca," Barry D.Quart, president and CEO of Ardea, said in a press release. "From our earliestinteractions, we were impressed with the quality of AstraZeneca's people and weare confident their commercial strength and global reach will help realize thefull potential of our programs. The Ardea team and I are committed to helpingcomplete development and working to secure registration for lesinurad."
"This attractive phase III program is an excellentopportunity to leverage AstraZeneca's global specialty and primary care salesand marketing capabilities," David Brennan, CEO of AstraZeneca, said in a pressrelease. "The Ardea team has done a great job developing lesinurad along with apromising next-generation gout program. These compounds have real potential tobenefit patients."
Ardea also has another candidate in its pipeline for thetreatment of gout, RDEA3170, a next-generation selective URAT1 inhibitor thatis approaching phase II development. The company is also developing BAY86-9766, what used to be RDEA119, under a global license agreement with BayerHealthCare AG for primary liver cancer and advanced pancreatic cancer.
It is planned that filings for a new drug application in theUnited States and a marketing authorization application in the European Unionwill be submitted in the first half of 2014 for lesinurad. AstraZeneca willabsorb the further development costs for Ardea's drug candidates into its ownexisting research and development program.
The acquisition of Ardea is still subject to shareholder approval as wellas customary closing and regulatory conditions, and is expected to close in thesecond or third quarter of 2012.
Meanwhile, Amylin Pharmaceuticals Inc., which spurneda $3.5 billion takeover bid from Bristol-Myers Squibb Co. recently, reportedly has begun looking for potentialbuyers, according to unnamed sources cited by Reuters and other media outlets, and AstraZeneca is seen by many market-watchers as a potential buyer, along with such companies as Takeda and Merck & Co.
Amylin and its financial and M&A advisers declined to comment.
Amylin, if it did enter the AstraZeneca family, would bring with it the well-established diabetes drugs Byetta and Bydureon. Although AstraZeneca remains tight-lipped, its head of research, Martin Mackay, has told media that
while he can't comment on specific companies, "we look at everything."
