ACHN Stock Soars 70% Following Acquisition By Alexion Pharmaceuticals

ACHN Stock

ACHN stock has gained 70% today after it was announced that Alexion Pharmaceuticals (NASDAQ:ALXN) would acquire Achillion Pharmaceuticals (NASDAQ:ACHN) in a deal worth $930 million USD.

Alexion to Pay 73% Premium on ACHN Stock

In a move that will allow Alexion to consolidate its status as a market leader in treating rare blood disorders, it will pay a 73% premium in order to take control of Achillion’s two experimental treatments for paroxysmal nocturnal hemoglobinuria (PNH), a market it has dominated with its flagship drug Soliris. Alexion Pharmaceuticals now faces various patent challenges and is attempting to combat this by switching patients who are already being treated with Soliris to its successor drug, Ultomiris. Due to the high premium on ACHN stock, ALXN stock is down 3.5% today.

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Investors in ACHN stock will receive $6.30 per share held and are eligible to get another $2 per share subject to certain considerations, the companies said. The deal is expected to close in the first half of 2020. The deal is seen as a big win for ACHN shareholders after Achillion Pharmaceuticals switched its focus to treating blood disorders following Johnson & Johnson’s (NYSE:JNJ) withdrawal from a collaborative development of a hepatitis C treatment in 2017.

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Strategic Rationale

“The transaction has strong strategic rationale as a defensive play for Alexion versus competitors,” according to Evercore ISI analyst Josh Schimmer, as the deal would allow Alexion Pharmaceuticals to preserve Ultomiris’s market share and defend its franchise. Soliris sales reached $3.56 billion last year, accounting for about 86% of the drugmaker’s total revenue and contributing to a massive 146% rise in ACHN stock in 2019, before this deal was announced.

ACHN stock soared 55% back in July following a highly successful phase 1 trial of an experimental oral factor D inhibitor, ACH-5228. The success of this trial raised the possibility that the drug could be fast-tracked for approval by the FDA and is most likely one of the driving factors in the substantial premium that Alexion has agreed to pay for Achillion Pharmaceuticals.

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