AstraZeneca has entered into a definitive agreement to acquire Nasdaq-listed ZS Pharma, a biopharmaceutical company based in San Mateo, California.
As explained by AstraZeneca, ZS Pharma uses its proprietary ion-trap technology to develop novel treatments for hyperkalaemia (high potassium levels), a serious condition of elevated potassium in the bloodstream, typically associated with chronic kidney disease (CKD) and chronic heart failure (CHF).
AstraZeneca said Friday that the transaction would enable it access to the potassium-binding compound ZS-9, a potential best-in-class treatment for hyperkalaemia, a condition associated with increased mortality in CKD and CHF. ZS-9 is under regulatory review by the US Food and Drug Administration with a Prescription Drug User Fee Act goal date of 26 May 2016. A submission for European Marketing Application Authorisation is planned by the end of 2015. Current estimates for global peak year sales of ZS-9 exceed $1 billion.
Pascal Soriot, Chief Executive Officer of AstraZeneca, said:
“Hyperkalaemia can be a life-threatening condition for patients with chronic kidney disease and chronic heart failure, however the risk is underappreciated and prevalence is increasing. This acquisition complements our strategic focus on Cardiovascular and Metabolic Disease by adding a potential best-in-class treatment to our portfolio of innovative medicines. We look forward to welcoming the ZS Pharma team to AstraZeneca.”
$2,7billion transaction
AtraZeneca further said that ,under the terms of the agreement, it will acquire all of the outstanding capital stock of ZS Pharma for $90 per share in an all-cash transaction, or approximately $2.7 billion in aggregate transaction value.
Upon completion, ZS Pharma, which has around 200 employees across three sites in California, Texas and Colorado, will become a wholly owned subsidiary of AstraZeneca.
Robert Alexander, Chief Executive Officer, ZS Pharma, said:
“This agreement will allow us to maximize the potential of ZS-9, drawing on AstraZeneca’s long-standing expertise in developing and commercializing medicines for cardiovascular and metabolic diseases. We look forward to joining AstraZeneca and to working together to bring this important treatment for hyperkalaemia to the global market, helping to meet an important unmet medical need for patients.”
Terms of the acquisition
As more explained by AstraZeneca’s press release, the acquisition is structured as an all-cash tender offer for all outstanding shares of ZS Pharma common stock at a price of $90 per share, followed by a merger in which each remaining untendered share of ZS Pharma common stock would be converted into the same $90 cash per share consideration as in the tender offer.
Under the terms of the merger agreement, AstraZeneca will begin a tender offer to acquire all outstanding shares of ZS Pharma’s common stock. The Board of Directors of ZS Pharma has unanimously approved the terms of the agreement.