Achillion Pharma Shares Open 75% Higher After Alexion Buyout Offer

October 18, 2019

By The Life Science Report

Source: Streetwise Reports   10/16/2019

Shares of Achillion Pharmaceuticals are trading much higher today after the firm reported that it has agreed to be acquired by Alexion Pharmaceuticals for $930 million, or $6.30 per share in cash, along with the potential for an additional $2 per share if certain other specific clinical trial and regulatory milestones are met.

This morning prior to the market open, Achillion Pharmaceuticals Inc. (ACHN:NASDAQ) and Alexion Pharmaceuticals Inc. (ALXN:NASDAQ) announced that they have entered into a definitive agreement for Alexion to acquire Achillion, a clinical-stage biopharmaceutical company “focused on the development of oral small molecule Factor D inhibitors to treat people with complement alternative pathway-mediated rare diseases, such as paroxysmal nocturnal hemoglobinuria (PNH) and C3 glomerulopathy (C3G).” The release indicates that Achillion currently has two clinical-stage medicines in development, danicopan (ACH-4471) in Phase 2 and (ACH-5228) in Phase 1.

Under the terms of the transaction, Achillion shareholders will initially receive $6.30 cash per share of Achillion common stock, for a total price of approximately $930 million. The report further indicates that the transaction includes the potential for additional consideration in the form of non-tradeable contingent value rights (CVRs), which will be paid to Achillion shareholders if certain clinical and regulatory milestones are achieved within specified periods. These CVRs include $1.00 per share for the FDA approval of danicopan and $1.00 per share for ACH-5228 Phase 3 initiation.


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The report notes that the acquisition is subject to the approval of Achillion shareholders and satisfaction of customary closing conditions and approval from relevant regulatory agencies, including clearance under the Hart-Scott Rodino Antitrust Improvements Act, and is expected to close in the first half of 2020.

For Alexion, the benefit of the deal is that it adds a clinical-stage portfolio of oral small molecule Factor D inhibitors to its pipeline. “Factor D is an essential serine protease and critical control point in the alternative pathway (AP) of the complement system, a part of the innate immune system.” The release further states that deal provides the opportunity to “enhance treatment for Paroxysmal Nocturnal Hemoglobinuria (PNH) patients experiencing extravascular hemolysis (EVH) with a potential first-in-class C3 Glomerulopathy (C3G) therapy and promising development platform for Factor D inhibition in additional alternative pathway complement-mediated rare diseases.” C3G is an ultra-rare kidney disease for which there is no approved treatment.

Achillion ‘s President and CEO Joe Truitt commented, “We have established great momentum—discovering and advancing several small molecules into clinical development that have the potential to treat immune-related diseases associated with the alternative pathway of the complement system. . .Having already demonstrated proof-of-concept and proof-of-mechanism with our lead candidate, danicopan (ACH-4471), in PNH and C3G, respectively, we believe there is significant opportunity for Factor D inhibition in the treatment of other diseases as well. Alexion is an established leader in developing medicines for complement-mediated diseases, and we look forward to working together to accelerate our objective of bringing novel therapies to patients as quickly as possible and ensuring that the broad promise of this approach is fully realized.”

Ludwig Hantson, Ph.D., CEO of Alexion, stated, “Alexion has demonstrated the transformative impact that inhibiting C5 can have on multiple rare and devastating diseases. However, we believe this is just the beginning of what’s possible with complement inhibition…Targeting a different part of the complement system—the alternative pathway—by inhibiting Factor D production addresses uncontrolled complement activation further upstream in the complement cascade, and importantly, leaves the rest of the complement system intact, which is critical in maintaining the body’s ability to fight infection. We believe this approach has the opportunity to help patients with diseases not currently addressed through C5 inhibition. We look forward to applying our nearly three decades of complement and development expertise to unlock the potential of oral Factor D inhibitors and bring these benefits to patients.”

Alexion Pharmaceuticals is headquartered in Boston, Mass., and has offices around the world serving patients in more than 50 countries. It describes itself as a global biopharmaceutical company “focused on serving patients and families affected by rare diseases through the discovery, development and commercialization of life-changing therapies,” and focuses its research efforts on the core therapeutic areas of hematology, nephrology, neurology and metabolic disorders. Alexion trades under the symbol ALXN on the NASDAQ and has a market capitalization of about $23.5 billion.

Achillion Pharmaceuticals is a “clinical-stage biopharmaceutical company focused on advancing its oral small molecule complement inhibitors into late-stage development and commercialization” in the therapeutic areas of nephrology, hematology, ophthalmology and neurology. The firm notes that the potential indications being evaluated for its compounds include paroxysmal nocturnal hemoglobinuria (PNH), C3 glomerulopathy (C3G), and immune complex membranoproliferative glomerulonephritis (IC-MPGN). The company reports that it received Breakthrough Therapy designation for danicopan for treatment in combination with a C5 monoclonal antibody for patients with paroxysmal nocturnal hemoglobinuria (PNH) who are sub-optimal responders to a C5 inhibitor alone.

Achillion Pharmaceuticals began the day with a market capitalization of about $509.9 million and approximately 139.7 million outstanding shares. ACHN shares opened nearly 75% higher on the news today at $6.38 (+$3.65, +74.79%) compared to the prior day’s $2.73 closing price. The stock has traded today on very high volume between $6.10 and $6.44/share and at present is trading at $6.23 (+$2.58, +70.68%).

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