) recently announced that its global biologics research and
development arm, MedImmune, has entered into an agreement to
acquire privately-held U.S. based company, Amplimmune. The deal
is expected to close in the third quarter of 2013.
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As per the terms of the deal, AstraZeneca will make an upfront
payment of $225 million to Amplimmune. Amplimmune will also be
eligible to receive development-based milestone payments of up to
$275 million from AstraZeneca.
With this acquisition, AstraZeneca will be strengthening its
oncology pipeline. Amplimmune focuses on developing treatments
related to cancer immunology. The Amplimmune acquisition will add
oncology candidates such as AMP-224 (phase Ib) and AMP-514
(late-stage pre-clinical trial with investigational new drug
filing planned by year end) to AstraZeneca's pipeline.
This deal is in line with AstraZeneca's strategy of boosting its
pipeline by acquiring candidates. Generic competition has been
adversely impacting AstraZeneca's revenues over the past few
quarters. This has put significant pressure on the company.
In a bid to add late-stage candidates to its pipeline,
AstraZeneca entered into a number of acquisition deals (Pearl
Therapeutics and Omthera Pharmaceuticals) in the last few months
and agreements with companies such as FibroGen, Inc.
We believe the proposed acquisition of Amplimmune makes strategic
sense. AstraZeneca already has a number of immune-mediated cancer
candidates including tremelimumab and MEDI-4736. Amplimmune's
technology and pipeline will boost AstraZeneca's pipeline and
The AstraZeneca - Amplimmune announcement comes close on the
heels of the news of
) upcoming acquisition of
Onyx Pharmaceuticals, Inc.
) for $10.4 billion. We note that several pharma and biotech
companies are focusing on acquiring pipeline candidates and
products that look promising, instead of developing a product
from scratch, which involves a lot of funds and time.
AstraZeneca currently carries a Zacks Rank #3 (Hold). At present,
) look well-positioned with a Zacks Rank #1 (Strong Buy).