AstraZeneca to Buy China's Gracell Biotech in a $1.2 Bn Deal

AstraZeneca will also acquire Gracell's cash, cash equivalents and short-term investments of $234.1 million as of September 30, 2023. The deal is expected to close in the first quarter of 2024.

Global Pharmaceutical player AstraZeneca has agreed to buy China-based Gracell Biotechnologies for up to $1.2 billion to further its cell therapy ambitions.

Gracell BIotechnologies aims to disrupt conventional approaches to CAR-T cell therapies with their pioneering FasTCAR and TruUCAR technology platforms. These platforms are designed to overcome challenges with conventional CAR-T therapies, including lengthy manufacturing time, suboptimal production quality, high therapy cost, and lack of effective CAR-T therapies for solid tumours.

The cash deal, which adds several experimental therapies to AstraZeneca's portfolio, values Gracell at $2 per ordinary share, or $10 per American Depository Share, of Gracell, representing a premium of 61.6% from its last close on December 22.

The shareholders will also receive a non-tradable contingent value right of $0.30 per ordinary share if certain regulatory milestones are met.

AstraZeneca will also acquire Gracell's cash, cash equivalents and short-term investments of $234.1 million as of September 30, 2023. The deal is expected to close in the first quarter of 2024.

This strategic move aligns with the company’s aim to boost its presence in China, the world's second-largest pharmaceuticals market.

Established in 2017 by Dr William Wei Cao, the China-based clinical-stage biopharmaceutical company is dedicated to discovering and developing innovative and highly productive cell therapy to address major industry challenges and fulfil unmet medical needs in the treatment of cancer and autoimmune diseases.

While AstraZeneca on the other hand was founded in 1999, through the merger of the Swedish Astra AB and the British Zeneca Group, the pharmaceutical biotechnology company aims to transform the lives of people affected by rare diseases.

AstraZeneca, one of the biggest drugmakers in China, had drafted plans to spin off its business in the region and in view of it, last month, it agreed to a licencing deal for an experimental anti-obesity pill from China's Eccogene. Further, in August it announced a contract manufacturing deal with CanSino Biologics for its messenger RNA technology vaccine program.

Days back, AstraZeneca bought respiratory vaccine developer Icosavax for a $1.1 billion deal. The cash deal aimed at strengthening AstraZeneca's drugs pipeline that values US-listed Icosavax at $15 per share.

The agreement is designed to tap into the substantial RSV market, which also aligns with a time when AstraZeneca experienced a significant decrease in sales of its COVID-19 vaccine after the conclusion of the pandemic.