(Reuters) – Drugmaker Alexion Pharmaceuticals Inc said it would buy Synageva BioPharma Corp for $ 8.4 billion to boost its rare drug pipeline.
Alexion’s cash-and-stock offer values Synageva at $ 225.92 per share — more than double of Synageva closing price of $ 95.87 on Tuesday.
Synageva’s shares were trading at $ 216 before the bell on Wednesday, while Alexion was down 4 percent at $ 162.
Makers of drugs that treat rare diseases are attractive because they typically charge hefty premiums for their products.
The deal will give Alexion access to Kanuma – Synageva’s treatment for a rare disease called Lysosomal Acid Lipase Deficiency, where build-up of fatty material in the blood and liver causes unexpected complications and some times early death.
Kanuma’s marketing application is being reviewed in the United States and Europe.
The deal is the latest in a string of M&As in the healthcare sector this year.
Recent deals involving rare disease companies include Teva Pharmaceutical Industries Inc’s $ 3.5 billion purchase of Auspex Pharmaceuticals in March and Shire’s acquisition of NPS Pharmaceuticals for $ 5.2 billion in January.
Alexion is offering $ 115 in cash and 0.6581 of its shares for each share of Synageva.
The deal is expected to add to Alexion’s 2018 profit, while allowing $ 150 million in cost savings in 2017, the companies said in a statement.
Alexion has received committed financing of $ 3.5 billion from Bank of America Merrill Lynch and JPMorgan for the deal.
Lazard and JPMorgan were Alexion’s financial advisers, while Goldman Sachs advised Synageva.
Wachtell Lipton Rosen & Katz is Alexion’s legal counsel, while Sullivan & Cromwell LLP and Ropes & Gray LLP are Synageva’s legal counsel.
(Reporting by Vidya L Nathan and Ankur Banerjee in Bengaluru; Editing by Savio D’Souza and Saumyadeb Chakrabarty)
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