AstraZeneca builds in China as Cosette buys Mayne

The week has ended with a flurry of M&A in the drug industry, with Cosette Pharmaceuticals agreeing to buy Australia's Mayne Pharma and AstraZeneca buying the Chinese subsidiary of FibroGen.

First up, Cosette's AUD 672 million (around $430 million) play for Mayne Pharma, which the company said would build its presence in women's health in the US and expand its geographic reach.

Both companies have a focus on women's health and dermatology, and adding Mayne to Cosette's stable will extend the US company's portfolio with brands like oral contraceptive Nextstellis, which saw sales in fiscal 2024 grow 113% to $30 million and helped the company's revenues rise 112% to nearly $248 million.

Cosette is not publicly listed and is backed by private equity group Avista Healthcare Partners and funds managed by Hamilton Lane – so doesn't publish financial results – but has shown itself to have deep pockets with a series of bolt-on acquisitions in recent years.

Deals in the last 18 months alone include the purchase of Sanofi's US Ambien (zolpidem) insomnia range, Palatin's female hypoactive sexual desire disorder (HSDD) product Vyleesi (bremelanotide), and Endoceutics' Intrarosa (prasterone) for menopause-related disorder dyspareunia.

Apurva Saraf, president and chief executive of Cosette, said that adding Mayne would be a "transformational step", giving the company 12 patented brands in women's health and dermatology. The deal is expected to close in the second quarter, after which Mayne's 480-strong workforce will join Cosette's team of around 350 staffers. Mayne's share price rose 33% after the announcement.

Meanwhile, it appears that AZ's recent run-ins with the Chinese authorities have not stopped the company from expanding its presence in the country.

The UK-headquartered group has agreed to buy the Chinese subsidiary of FibroGen for around $160 million, claiming ownership of Evrenzo (roxadustat), FibroGen's treatment for anaemia associated with chronic kidney disease (CKD), which AZ has been helping to sell in China.

AZ was formerly partnered on the drug in other markets, including the US, but exited the alliance a year ago and returned rights to FibroGen. That decision came a couple of years after Evrenzo was turned down for approval by the FDA, with its future in the US still up in the air.

Sales of the drug in China were around $281 million in 2023, and AZ also has comarketing rights to the drug in South Korea.

AZ is already a major overseas player in the Chinese pharma market, but has been under the spotlight of late as a result of an investigation into unpaid taxes on drug imports and suspected data privacy breaches. Last October, the president of AZ's Chinese operations, Leon Wang, stepped down and was detained by the authorities.