"Science and Technology Innovation Board**" on December 27 (reporter Zheng Bingxun intern reporter Zhang Zhen).The pharmaceutical industry once again ushered in a signal of recovery.
Recently, AstraZeneca announced that it has signed a definitive agreement with the other party for the acquisition of Gracell Biologics. The former will close at the close of the transaction at a price of $2** per share of common stock.
Founded in May 2017 and listed on NASDAQ less than 4 years after its establishment, Gracell is the fourth Chinese CAR-T cell ** company to land in the capital market after Nanjing Legend, JW Therapeutics and Yongtai Biologics.
After this transaction,Gracell has also become the first Chinese innovative pharmaceutical company to be fully acquired by MNC since China Biotech.
Next year, the MNC acquisition may be more frequent
It is reported that the cash down payment of this transaction is about US$1 billion, which is a 62% premium to Gracell's ** price on December 22 and 3% higher than the 60-day volume weighted average ** (VWAP) before the announcement$94 premium of 154%. At the same time, if the potential payment can be reachedThe total value of the deal will be $1.2 billion, representing a 192% premium to the 60-day VWAP.
Stimulated by this good news, the U.S. stock of Gracell Biotech soared by more than 70% in pre-market on the 26th. As of press time, Gracell Biotech **9$92 shares, with a total market capitalization of 9$5.8 billion, which is still far from the total price of $1.2 billion in the transaction.
In fact, despite the recent financing difficulties and valuation inversions in the pharmaceutical industry, AstraZeneca has exploded with amazing sweeping efforts for domestic innovative drugs.
For example, on November 9, AstraZeneca and Chengyi Biotech reached an exclusive cooperation of US$2 billion on the GLP-1 drug ECC5004, and soon after, it reached a global exclusive licensing agreement with Yusen Jianheng for the small molecule drug candidate UA022 project targeting the KRAS G12D mutation, with a total value of more than US$400 million.
In terms of biotech acquisitions, AstraZeneca announced the acquisition of Cincor for $1.8 billion at the beginning of this year, with the intention of strengthening the pipeline of new drugs under development in the field of heart and kidney diseases through the latter's drug candidate Baxdrostat (CIN-107). AstraZeneca's acquisition of Gracell Biotech is its second acquisition this year.
Not only AstraZeneca, but also this year's MNC giants have joined the Biotech army under the capital winter.
According to the data, as of December 26, there have been 396 ongoing and completed mergers and acquisitions in the healthcare sector worldwide since 2023.
For example, Pfizer's acquisition of Seagen at a "sky-high" price of $43 billion and BMS's acquisition of Karuna at a $14 billion price have become the two largest one-to-one acquisitions this year. This compares to 368 completed M&A deals in healthcare globally in 2022.
Chen Zhu, chief medical and health industry analyst of CITIC, told the reporter of "Science and Technology Innovation Board"."In terms of trend, the Fed expects the easing of funds brought about by interest rate cuts, and the acquisition of MNC will be more frequent next year. ”This is because under the capital "winter", the valuation of small biotech companies will be cheaper.
With this acquisition, the two companies may have fired the first shot of the domestic biotech merger and acquisition wave.
Why car-t?
AstraZeneca emphasized that the acquisition will add GC012F CAR-T cells** to its cell ** pipeline and deepen its layout in the cell ** field.
It is true that CAR-T cells** are one of the hottest cellular immunity** technologies in the world in recent years, and their cell-based individualization technology uses genetic engineering technology to introduce a special receptor, chimeric antigen receptor (CAR), into T cells by extracting the patient's own T cells. These engineered T cells are reinfused back into the patient's body and are able to recognize and attack cancer cells that carry specific antigens.
However, as an innovative pharmaceutical company focusing on car-t**, Gracell Biotech has its own "hidden concerns".
In November this year, the U.S. FDA issued an announcement announcing that it was investigating the risk of T-cell malignancies in patients after autologous CAR-T cell immunity** targeting BCMA or CD19, and some of them were hospitalized or even died in severe cases.
At that time, affected by the "serious risk" investigation of CAR-T**, the CAR-T cell sector of the U.S. stock market was one after another. As a result, the domestic capital market has also suffered a heavy setback, including CARsgen Pharmaceutical (02171.).HK), JW Therapeutics (02126HK), Fosun Pharma (02196HK) and other concept stock companies have seen changes in their stock prices.
Coincidentally, GC012F, the eye of the typhoon of this acquisition, is a CAR-T** targeting BCMA CD19, and its indications cover multiple myeloma (MM), B-cell non-Hodgkin lymphoma (B-NHL), etc.
However, in response to the FDA's investigation into the safety of CAR-T**, an investor told the reporter of the "Science and Technology Innovation Board**".It is the norm for antineoplastic drugs to have ***, but the incidence of secondary cancer is not high, especially for generic CAR-T (UCAR-T) products, the incidence is even lower.
Science and Technology Innovation Board**" reporter noted,Gracell is at the forefront of deploying general-purpose CAR-T products, which may be one of the reasons for AstraZeneca's acquisition.
According to public information, Gracell's other well-known pipeline product, GC007G, is an allogeneic CAR-T cell targeting CD19 donor**, which is prepared using T cells from HLA-matched healthy donors, and has entered the phase 2 phase II clinical trial in China.
In addition, Gracell Biotech's general-purpose CAR-T products include GC502 and GC027. The former targets CD19 and CD7 and is mainly used for **b-all;The latter targets CD7 and is mainly used for **t-all. Both products are currently in early clinical stages.
"Sell yourself" or "win-win"?
As part of the transaction, AstraLaser will also receive all of Gracell's cash, cash equivalents and short-term investments. As of September 30, 2023, Gracell had total assets of 2$3.4 billion.
However, what AstraZeneca attaches more importance to is obviously the three major technology platforms established by Gracell in the field of CAR-T cells: FastCar next-day production technology platform, TruCar and Smart Cart, as well as the CAR-T product GC012F developed based on the technology platform.
Even if we switch perspectives, from the perspective of Gracell Biotech, we cannot characterize this acquisition as a "sell-out", in fact, this is closer to a "win-win".
The R&D of CAR-T** has always been known for its high cost, and according to Gracell Biotech's earlier disclosure, the company's R&D expenditure in 2021 and 2022 will be 326.9 billion yuan and 485.4 billion yuan. Although R&D expenses in the third quarter of this year have increased from 13.3 billion yuan was reduced to 90.1 million yuan, but the company's cash flow is obviously not enough to support the completion of various expensive clinical trials at home and abroad.
According to ICON data, nearly half of biotechs in 2023 chose to partner with Big Pharma as a funding method. Coinciding with the capital trough cycle of the pharmaceutical industry, it is not a wise business decision to be acquired through mergers and acquisitions in exchange for R&D strength. In fact, as soon as the news of the acquisition came out yesterday, the reporter of "Science and Technology Innovation Board**" noticed that many investors said in the circle of friendsI hope that my investment projects will also be seen by large companies in the future
In the past, in the car-t** going to sea, it was the legendary creatures that did a better job. In 2017, Legend Biotech released the early clinical data of the first CAR-T** cilta-cel in China. In December of the same year, Johnson & Johnson won with 3With a down payment of 500 million US dollars, he bought this car-t**, which set a new record for the highest down payment of a domestic innovative pharmaceutical company at that time. Since then, Legend Biotech's overseas model has been sought after and imitated by a number of innovative pharmaceutical companies.
Commenting on the acquisition, Gracell founder, chairman and CEO Wei Cao said, "We look forward to working with AstraZeneca to accelerate our shared vision of delivering transformative cells** to more patients in need." By combining our respective expertise and resources, we hope to unlock a new path to fully realize the value of Gracell's FastCar next-day production platform." ”
Perhaps,The acquisition at a premium is also another way for CAR-T** to go overseas, and it is the best proof of biotech's ability