AstraZeneca has agreed to take a majority equity stake (55%) in Acerta Pharma, a privately owned biopharmaceutical company based in the Netherlands and US in deal valued up to $4 billion. The transaction provides AstraZeneca with a an oral Bruton’s tyrosine kinase (BTK) inhibitor, acalabrutinib, currently in Phase III development for B-cell blood cancers and in Phase I/II clinical trials in multiple solid tumors.

Under the deal, AstraZeneca will acquire 55% of the entire issued share capital of Acerta for an upfront payment of $2.5 billion. A further unconditional payment of $1.5 billion will be paid either on receipt of the first regulatory approval for acalabrutinib for any indication in the US, or the end of 2018, depending on which is first. The agreement also includes options which, if exercised, provide the opportunity for Acerta shareholders to sell, and AstraZeneca to buy, the remaining 45% of shares in Acerta. The options can be exercised at various points in time, conditional on the first approval of acalabrutinib in both the US and Europe and when the extent of the commercial opportunity has been fully established, at a price of approximately $3 billion net of certain costs and payments incurred by AstraZeneca and net of agreed future adjusting items, using a pre-agreed pricing mechanism.

AstraZeneca plans initial regulatory submissions for acalabrutinib in the second half of 2016 for the treatment of patients with specific types of hematological malignancies. Expanding further into B-cell cancers, acalabrutinib is estimated to reach potential peak-year sales in excess of $5 billion globally.

The BTK inhibitor class is a new class of drugs for treating B-cell blood cancers, allowing a potentially more effective treatment option with limited side effects, replacing current chemotherapy and antibody-containing regimens. Acalabrutinib is a small-molecule oral BTK inhibitors. In addition to blood cancers, acalabrutinib is currently being explored in Phase I/II studies in combination with immunotherapy or chemotherapies in a range of solid tumors. Pre-clinical data show that acalabrutinib has an immune-modulatory effect that, as monotherapy and alongside PD-1/PD-L1 antibodies, has the potential to enhance anti-tumor activity.

Acerta will initially be a majority owned subsidiary of AstraZeneca; if AstraZeneca acquires the remaining shares of the company in the future, Acerta would become a wholly owned subsidiary. The transaction will be accounted for as a business combination and is expected to complete by the end of the first quarter of 2016, subject to customary closing conditions. The initial acquisition payment of $2.5 billion will be funded from cash and debt. With the acquisition, AstraZeneca will also gain Acerta's approximately 150 employees.

Another key acquisition this year relating to BTK inhibitors was AbbVie’s $21 billion acquisition of Pharmacyclics,, a biopharmaceutical company specializing in hematological oncology drugs. Pharmacylics’ lead product is Imbruvica (ibrutinib), a BTK inhibitor approved for use in four indications to treat three different types of blood cancers, including chronic lymphocytic leukemia, mantle cell lymphoma, and Waldenstrom’s macroglobulinemia. Imbruvica is being jointly developed and commercialized by Janssen, part of Johnson & Johnson, and Pharmacyclics LLC, which AbbVie acquired in May 2015.

Source: AstraZeneca