Astra Confident Shareholders Will Back $39 Billion Alexion Deal

AstraZeneca Plc is confident shareholders will back its $39 billion takeover of rare-disease specialist Alexion Pharmaceuticals Inc. next week as the British company looks to the next chapter of its growth.

“It is quite rare to find somebody who says it’s not a good idea, so we are confident that this will turn out OK,” Marc Dunoyer, the drugmaker’s chief financial officer, said in an interview Thursday. The deal marks “the next stage” in Astra’s growth trajectory, he said.

The acquisition was first announced in December, taking a number of investors by surprise in the midst of Astra’s efforts to launch its Covid-19 vaccine. With very little crossover in portfolios, it moves Astra into a lucrative new area of medicine: rare diseases. Shareholders are scheduled to vote on the deal Tuesday, the day of Astra’s annual meeting, after which the companies will move to close the transaction in the third quarter.

As recently as this week, analysts had speculated that another company could make a competing bid for Alexion.

One Oppenheimer analyst said Wednesday that Astra was getting a “biotech jewel on the cheap” and suggested drugmakers including Pfizer Inc. might be interested. Given that the shareholder vote is days away, any rival bidder would presumably have already made its move, according to Dunoyer.

Biggest Deal

Alexion’s different portfolio was part of the attraction, complementing one of Astra’s focus areas -- cardiovascular, renal and metabolism ailments, the CFO said. No major divestments are planned after the deal, he said.

The purchase of the U.S. biotech marks the largest transaction for Astra since it was founded in a 1999 combination of British and Swedish firms and entrenches its position among the world’s 10 biggest drugmakers. Dunoyer said the company chose Alexion because of the science behind its drugs and the fact it could give Astra “sustainable growth for years to come,” adding that no more big deals are planned in the near-term.

Dunoyer dismissed any idea the Alexion move was defensive. Astra successfully fought off a hostile takeover from Pfizer in 2014, but the situation left questions over whether the British giant could become a target again.

After the company’s turnaround, “we wanted to give it several years to demonstrate that this is stable and robust, and then we said ‘What do we do next?’” said Dunoyer, 68, speaking from France where he’s waiting to get his second Covid-19 vaccine. The Alexion deal is “not defensive at all; it’s more what’s the next chapter for us.”

Pandemic Challenges

The U.S. Federal Trade Commission backed the transaction last month, a key step to closing the deal. The approval comes after the FTC announced it would look more closely at pharma deals over competition concerns. The companies encountered nothing unusual in the process, Dunoyer said, noting that he thought the FTC was more focused on preventing the “gobbling up of pockets of innovation” by large companies.

While Astra may have convinced investors on paper, the proof of the deal will be in the execution. Dunoyer said the fact the company managed to put the agreement together virtually makes them optimistic they can also navigate the integration remotely for as long as the pandemic requires.

“It’s probably the first time a deal of that magnitude was done without constant real-life interactions,” he said. “It’s not helping us, but you can do it despite those constraints.”

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