(Alliance News) - AstraZeneca PLC said Friday its Alexion Pharmaceuticals Inc takeover has been given the go-ahead by the US Federal Trade Commission.
FTSE 100-listed Astra said the move from the US regulator is an "important step" toward completing the deal.
The US clearance follows competition clearances in Canada, Brazil and Russia, but Astra is still waiting on clearance in the UK, EU and Japan.
Astra Executive Director & Chief Financial Officer Marc Dunoyer said: "These clearances further advance us towards closing our acquisition of Alexion. We remain focused on the next chapter for AstraZeneca and Alexion, building on our combined expertise in immunology and precision medicines and our shared ambition to bring more innovative medicines to patients worldwide.
"We look forward to working closely with other global authorities as we progress toward this goal."
Astra agreed a deal for US biotech firm Alexion in December for USD39 billion to boost its work on immunology.
The transaction is expected to clear by the third-quarter of 2021.
Speaking Friday, Astra said: "Subject to a successful completion of the acquisition, a dedicated business unit will be created, known as 'Alexion, The AstraZeneca Rare Disease Unit', headquartered in Boston, US.
"AstraZeneca will have an enhanced global footprint and broad coverage across primary, speciality and highly specialised care, and is expected to deliver double-digit revenue growth through 2025, double-digit core EPS accretion for the first three years as well as strong cash flow with an ambition to increase the dividend."
The deal garnered praise from analysts, with Jefferies - in mid-March - upgrading Astra to Buy from Hold, saying the Anglo-Swedish drugmaker's deal to acquire Alexion outweighs the negative headlines surrounding its coronavirus vaccine suspension on the continent.
Jefferies analyst Peter Welford said the risk-reward scenario for AstraZeneca is significantly more positive at these levels given its compelling growth profile within EU Pharma at a multiple similar to peers by 2023.
"AstraZeneca is best positioned in EU Pharma to benefit from reforms in China and has successfully capitalised on this with 15 products now on the Essential Drugs List, plus many entries on the NRDL, including Tagrisso, Lynparza, Forxiga and roxadustat," Welford noted.
On top of that, UBS upped its rating on Astra, believing the deal should drive "premium growth".
The deal is expected to close in the third quarter of this year, and will trigger an "inflection point" in terms of cash conversion, dividend growth and margin progression, UBS believes.
Due to its research & development budget needs, Astra in the past had to enter "convoluted deal structures" that didn't allow for sufficient conversion of top-line growth into cash flow, said UBS. The Alexion acquisition fixes this.
"In short with Alexion consolidated the company should be able to deliver a cleaner profile with premium growth which comes cheap at a sector like multiple when the sector can do about half that pace," said UBS. "The stock screens cheap in relative and absolute terms whilst leaving some interesting upside for grabs this year in the shape of Lynparza in the Propel trial and Enhertu in the Destiny-Breast04 trial that could add x and y to valuation."
Shares in Astra were 0.4% lower in London on Friday afternoon at 7,373.00 pence, while Alexion was 4.1% higher in pre-market trade in New York at USD164.02.
By Paul McGowan; paulmcgowan@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
Astrazeneca (AZN)
