AstraZeneca's $39 billion acquisition of Alexion is blocked in the UK

On Tuesday, the UK Competition and Markets Authority (CMA) stated that it has launched an antitrust investigation into AstraZeneca’s acquisition of Alexion.
The CMA said in an announcement that the agency doubted whether the transaction would harm competition in "any UK market or markets.
"

Currently, CMA is soliciting public comments until June 3 to help with the evaluation and strive to make a decision before July 21.
If by then, the CMA finds any reason to believe that there is a "realistic prospect" that is a threat to competition, it may initiate a more in-depth investigation.
According to CMA rules, under special circumstances, the Phase 2 assessment may last for 24 weeks or even 32 weeks.

For months, industry observers have been paying attention to the US FTC's review of trading decisions.
In March of this year, the agency launched a review of its current product-by-product method of evaluating biopharmaceutical M&A transactions.
Last year, the FTC stated that the increase in large-scale transactions such as Bristol-Myers Squibb’s acquisition of New Foundation may lead to high drug prices and anti-competitive behaviors such as delayed payment and settlement.

But to the surprise of pharmaceutical observers, the US FTC approved AstraZeneca's acquisition of Alexion last month, but did not raise any questions.
However, FTC's initiatives include cooperation with competition authorities in other countries.

As Axinn, partner of the law firm Axinn, Veltrop & Harkrider, pointed out in a recent interview, if the FTC wants to block a transaction in the United States, a federal judge must be persuaded, while colleagues in other places can block M&A transactions themselves.
Therefore, if the FTC and other regulators (such as the CMA) agree that the proposed transaction will harm competition, the FTC may be able to bypass onerous legal disputes and obtain the desired results by allowing other jurisdictions to block the transaction.

As far as AstraZeneca is concerned, the company portrays the acquisition of Alexion as a way to establish a strong position in rare diseases and immunology, rather than focusing on oncology, cardiovascular and metabolic diseases.
The shareholders of both companies approved the transaction.
AstraZeneca said it expects to complete the transaction in the third quarter.

According to the company, in addition to the United States, the transaction has also been approved by the competition authorities of Brazil, Canada, Russia and Japan.
In addition to the United Kingdom, other important antitrust decisions include the European Union and China.

AstraZeneca's acquisition of Alexion was announced in December 2020.
The method was cash + stocks, with a total transaction value of approximately US$39 billion.
According to the announcement issued by AstraZeneca at the time, the acquisition will enhance AstraZeneca’s scientific position in the field of rare diseases and immunology by bringing Alexion’s innovative complement technology platform and a strong pipeline.
At present, there are more than 7,000 rare diseases known, and only about 5% of the diseases have approved therapeutic drugs.
This is a disease field with high growth, rapid innovation, and serious unmet medical needs.

Alexion’s main products are two C5 inhibitors Soliris and Ultomiris, the latter is a long-lasting upgraded version of the former.
These two drugs have been approved for multiple super rare disease indications, and their combined sales in 2020 reached 5.
142 billion U.
S.
dollars.
In addition, the company's pipeline has a series of assets covering multiple disease areas.

AstraZeneca said that after the successful acquisition of Alexion, it will establish a dedicated business unit "Alexion-AstraZeneca Rare Disease Division".
By then, the company will expand its global coverage in the primary, specialist and highly specialized nursing fields.
It is expected to achieve double-digit revenue growth by 2025, double-digit core earnings per share (EPS) growth in the first three years, and strong Cash flow and increase dividends.
(Sina Pharmaceutical News)

Reference source:

1.
AstraZeneca hits UK antitrust roadblock with $39B Alexion buy despite US FTC clearance

2.
AstraZeneca receives US clearance of proposed acquisition of Alexion