The Alexian acquisition was a major expansion for AstraZeneca. Why the stock is at least 7%.

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Astrogenogen

Agreed to receive

Alexian drugs,

The company is expanding its footprint in the field of rare diseases and immunity to the British pharmaceutical maker in a year that has become a household name for raising the Govt-19 vaccine candidate with the University of Oxford.

As the market responded to the news on Monday, stock moves for the two companies diverged, with Alexian New York rising on the back burner as AstroGeneca plunged into London trading.

Then the story. AstraZeneca and Alexian both said on Saturday that they had agreed to a $ 39 billion cash and stock agreement with Alexian. The transaction is expected to close in the third quarter of 2021, subject to the approval and regulatory approvals of the shareholders of both companies.

Alexian’s best-selling drug is Solaris, one of the world’s most expensive drugs used to treat paroxysmal nocturnal hemoglobinuria (BNH) —a rare, life-threatening blood disease.

A big bet on rare-disease and immunosuppressive drugs will allow Astrogeneka to diversify its fast-growing cancer drugs business. The company said it expects the transaction to generate more than $ 500 million a year in pretax synergies and an immediate boost in revenue, while it would cost $ 650 million in cash to realize the synergies.

Also read:Astrogeneka to buy Alexian drugs for B 39 billion. Need to know.

What’s new. As markets opened after the weekend news of the acquisition, AstraZeneca’s share in London trading fell 9% to 7%, while Alexian shares rose more than 30% on New York bookings.

Analysts have analyzed the purchase price for Alexion 5 175 per share – this is the grand premium for the 1 121 final price of the stock on Friday.

“The Alexian deal represents 45% of the premium, which is invaluable. It is understood that the London-listed company will borrow $ 13 billion for the transaction,” said David Madden, market analyst at CMC Markets UK.

“This acquisition will give the pharmaceutical company more exposure to rare-disease and immunosuppressive drugs,” Madden said, adding that AstraZeneca has had recent success with its anti-cancer drugs.

Plus:City says Astrazeneca’s vaccine test mistake is a buying opportunity

Looking ahead. The biggest deal in AstraZeneca’s history, the market is worried that the company will pay more to Alexian, and analysts have praised the move to pull assets and drugs into its pipeline.

Another concern is that Alexian could try to get even more money from the British pharmaceutical maker. This may be unreliable. Alexian has been pushing for the sale since May, with a letter from management investor Elliott Associates asking the company to sell itself, pointing to management misconceptions. AstraZeneca’s offer is the only serious one Alexien got, which may be the perfect tonic.