AstraZeneca To Acquire ZS Pharma for $2.7 BillionBy
AstraZeneca has agreed to acquire ZS Pharma, a biopharmaceutical company based in San Mateo, California, for $2.7 billion or $90 per share in an all-cash transaction. ZS Pharma uses its proprietary ionÂ-trap technology to develop treatments for hyperkalaemia (high potassium levels), a serious condition of elevated potassium in the bloodstream, typically associated with chronic kidney disease (CKD) and chronic heart failure (CHF).
The transaction will give AstraZeneca access to the potassium-binding compound ZS-9, a potential best-in-class treatment for hyperkalaemia, a condition associated with increased mortality in CKD and CHF. ZS-9 is under regulatory review by the US Food and Drug Administration with a Prescription Drug User Fee Act goal date of May 26, 2016. A submission for European marketing application authorzsation is planned by the end of 2015. Current estimates for global peak year sales of ZS-9 exceed $1 billion, according to AstraZeneca.
ZS Pharma represents a strong fit with AstraZeneca's pipeline and portfolio in cardiovascular and metabolic disease, one of the company's three main therapy areas. AstraZeneca's strategy focuses on reducing morbidity, mortality, and organ damage by addressing multiple risk factors across cardiovascular disease, diabetes, and chronic kidney disease. ZS-9 complements the company's increasing focus on CKD and CHF, including the investigational medicine roxadustat, which is currently in Phase III development for patients with anaemia associated with CKD, as well as its diabetes portfolio.
Upon completion, ZS Pharma, which has around 200 employees across three sites in California, Texas, and Colorado, will become a wholly owned subsidiary of AstraZeneca.
The acquisition is structured as an all-cash tender offer for all outstanding shares of ZS Pharma common stock at a price of $90 per share, followed by a merger in which each remaining untendered share of ZS Pharma common stock would be converted into the same $90 cash per share consideration as in the tender offer. Under the terms of the merger agreement, AstraZeneca will commence a tender offer to acquire all outstanding shares of ZS Pharma's common stock. The board of directors of ZS Pharma has unanimously approved the terms of the agreement. Subject to customary closing and regulatory approvals, the transaction is expected to close by the end of 2015. The transaction is not subject to a financing condition.