AstraZeneca to buy CinCor Pharma for $1.8 billion

AstraZeneca Plc agreed to buy US biotech CinCor Pharma Inc. for as much as $1.8 billion to gain a promising new treatment for hypertension and kidney disease.

The deal is the first sizable one for Astra since the $39 billion takeover of rare-disease specialist Alexion Pharmaceuticals Inc. in 2021, and it’s in keeping with CEO Pascal Soriot’s strategy to beef up the UK drugmaker’s pipeline.

Investors will receive $26 in cash for each CinCor share, plus a non-tradeable right to a $10 per share payment that’s contingent on the company making a regulatory submission for its lead therapy baxdrostat, Astra said Monday.

The upfront price of $1.3 billion is more than double CinCor’s closing price on Friday, and the maximum price is about triple.

Astra shares fell as much as 1.4 per cent in London while CinCor more than doubled in New York, trading as high as $27.85.

Baxdrostat is intended to lower the blood pressure of people whose hypertension resists other treatments. CinCor suffered a setback in November, when the drug failed in one of several mid-stage clinical trials, causing the stock to plummet 47 per cent in a day.

“It’s unfortunately part of drug development,” CinCor CEO Marc de Garidel said in an interview, adding that the results were a surprise. “There are things that didn’t go right, and we have to understand and AstraZeneca will also draw its own conclusion on that study to make sure that it doesn’t happen again.”

For Astra, the November results “made us pause”, Mene Pangalos, head of the firm’s biopharmaceuticals research, said in an interview. But after looking at various data as well as the biological rationale, “we felt that this was still a highly active molecule with a very good chance of being a medicine”.

Baxdrostat’s peak revenue could be between $2 billion and $3 billion, according to Bryan Garnier analyst Alex Cogut.

Swiss biotech company Idorsia Ltd is developing a medicine called aprocitentan for a similar population: patients with difficult-to-control hypertension. Still, Astra’s Pangalos noted that it’s a different mechanism as well as a different patient population to baxdrostat.

Astra said baxdrostat could potentially be combined with its own blockbuster Farxiga. Such a combination may help Astra navigate the loss of exclusivity on Farxiga in coming years, Susie Jana, an analyst at Shore Capital, wrote in a note to clients.