AstraZeneca Reloads its Pipeline with Ardea Deal, Could be Still Hunting

AstraZeneca (NYSE: [[ticker:AZN]]), the global pharmaceutical giant based in London, is replenishing its drug pipeline with its acquisition of San Diego’s Ardea Biosciences (NASDAQ: [[ticker:RDEA]]), which was disclosed by both companies earlier today.

Britain’s second-largest drugmaker also could still be hunting, and might even have another San Diego company in its sights, according to press reports.

Ardea, founded in 1994, is focused on developing small-molecule drugs for the treatment of HIV, cancer, and inflammatory diseases. As Luke wrote a few years ago, the company lucked into its most advanced drug candidate, lesinurad, when Ardea scientists noticed a drug under development for treating HIV had reduced the amount of uric acid in the blood. Abnormally high levels of uric acid in the bloodstream can lead to a build-up of painful uric acid crystals in and around the connective tissue of the joints and in the kidneys—a condition also known as gout.

Lesinurad is now in late-stage development as a potential treatment for the chronic management of gout.

Meanwhile, half of AstraZeneca’s revenues are set to evaporate through 2016 as drug patents expire. The merger therefore is viewed as an effective way to replenish AstraZeneca’s drug pipeline, and boost shareholder support for CEO David Brennan ahead of the company’s annual meeting set for Thursday.

Under the terms of the agreement, AstraZeneca will acquire Ardea for $32 a share, which represents a total value of approximately $1.26 billion, including existing cash. The offer is more than 50 percent above Ardea’s closing price of $20.84 on Friday. The $1 billion net of cash deal is AstraZeneca’s biggest acquisition in five years.

Some press accounts suggest that AstraZeneca’s Ardea deal could be the first in a series of acquisitions of the British pharmaceutical. Astra Zeneca research chief, Martin Mackay, told the Reuters news agency last month he was looking at acquisitions in the “low billions” of dollars.

AstraZeneca has been identified as a potential bidder for Amylin Pharmaceuticals (NASDAQ: [[ticker:AMLN]]), the San Diego diabetes drug developer. Amylin, which spurned a $3.5 billion offer from Bristol-Myers Squibb earlier this year, has been working with Credit Suisse and Goldman Sachs to reach out to potential buyers, according to a report in The New York Times’ DealBook. Amylin’s willingness to consider a buyout follows pressure from Carl Icahn, the activist investor who has urged Amylin to seek a buyer and has threatened a proxy fight.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.