AstraZeneca (AZN.L) has announced its intention to acquire Gracell Biotechnologies (GRCL.O) for a total of up to $1.2 billion, marking a significant move in its pursuit of expanding its cell therapy initiatives and strengthening its presence in China, the world’s second-largest pharmaceutical market.
This cash transaction not only diversifies AstraZeneca’s portfolio with a range of experimental therapies but also values Gracell at $2 per ordinary share, or $10 per ADS of Gracell, along with a non-tradable contingent value right of $0.30 per ordinary share, contingent upon the achievement of specific regulatory milestones.
Gracell, based in China, saw its stock surge by a remarkable 65% in premarket trading in the United States following the announcement.
China holds a pivotal role for AstraZeneca, accounting for 13% of the company’s total sales in the year 2022.
Susan Galbraith, AstraZeneca’s Oncology R&D Vice President, expressed, “The proposed acquisition of Gracell will complement AstraZeneca’s existing capabilities and previous investments in cell therapy, where we have established our presence in CAR-T and T-cell receptor therapies in solid tumors.”
One of the standout technologies in Gracell’s repertoire is the Autologous CAR-T cell therapy, a revolutionary approach that reprograms a patient’s immune T-cells to specifically target disease-causing cells. Gracell’s FasTCAR platform has the potential to enhance T-cell fitness, potentially leading to more effective treatments for patients.
Additionally, as part of the acquisition, AstraZeneca will obtain Gracell’s cash, cash equivalents, and short-term investments, which amounted to $234.1 million as of September 30, 2023.
The completion of this deal is anticipated in the first quarter of 2024, as per the official statement.
This strategic move follows AstraZeneca’s recent licensing agreement for an experimental anti-obesity pill with China’s Eccogene and a contract manufacturing partnership with CanSino Biologics for its messenger RNA technology vaccine program in August.
These developments reinforce AstraZeneca’s commitment to expanding its presence and collaborations in the Chinese pharmaceutical landscape.
CEO Pascal Soriot previously announced three licensing agreements with Chinese companies earlier in the year.
In conclusion, AstraZeneca’s acquisition of Gracell Biotechnologies reflects the company’s dedication to advancing its cell therapy endeavors and strengthening its foothold in the burgeoning Chinese pharmaceutical market, paving the way for innovative therapies and expanded opportunities in the healthcare industry.