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Alexion acquiring Achillion to expand reach into rare, immune-related disease

Alexion Pharmaceuticals (ALXN) said Wednesday that it will acquire Achillion Pharmaceuticals (ACHN) to expand its pipeline of experimental drugs targeting rare diseases of the immune system.

The all-cash deal values Achillion at $930 million, or $6.30 per share, which represents a 72% premium over Achillion’s closing stock price on Tuesday. Achillion shareholders will also be offered a contingent value right worth another $2 per share, payable on the successful achievement of certain clinical and regulatory milestones.

Alexion is best known for its two injectable drugs, Soliris and Ultomiris, which treat rare diseases caused by the over-activation of C5, a component of the complement system, a part of the body’s immune system.

Achillion is developing oral drugs that inhibit the production of Factor D, which is involved in the “alternative pathway” of the complement system. In September, the Food and Drug Administration granted “breakthrough therapy designation” to Achillion’s lead Factor D blocker, danicopan.

Before Wednesday’s acquisition announcement, Achillion had been developing danicopan in combination with Alexion’s Soliris in patients with paroxysmal nocturnal hemoglobinuria, or PNH — a rare disease in which red blood cells are destroyed by over-activation of the complement system, a part of the body’s immune system. The company is also conducting a study of danicopan used alone to treat C3 Glomerulopathy, an ultra-rare kidney disease.

For Alexion, the decision to buy Achillion is part of a broader and ongoing plan to diversify its pipeline so that future growth is not so heavily reliant on revenue from Soliris and Ultomiris, while also staying true to its roots as a rare-disease company.

Despite a stellar financial performance over the past year, shares of Alexion are down 14% because of concerns that biosimilar versions of Soliris could crimp revenue growth.

For Achillion, the acquisition is somewhat of a take under. In 2015, the company was worth nearly $1.6 billion on the basis of some promising drugs for hepatitis C and rumors that it was acquisition bait for Gilead Sciences (GILD). But Achillion’s hepatitis C drugs faded, taking the stock price with it. Achillion shifted to developing complement-mediated diseases — and now an exit to Alexion.


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