UK competition watchdog probes AstraZeneca, Alexion merger


The antitrust authority in the UK has launched an investigation into the proposed $39 billion takeover of US firm Alexion by AstraZeneca.

The Competition and Markets Authority (CMA) is starting the first phase of the probe today, and said it should wrap it up by 21 July, deciding at that point whether to start a second, more in-depth appraisal of the deal. Comments on the deal can be submitted up to 3 June.

The decision to investigate stems from a legal requirement in the UK that requires the CMA to gauge whether an acquisition may result in a "substantial lessening of competition within any market or markets in the UK for goods or services."

The UK's move comes after antitrust authorities in the US and other markets including Canada have already given a green light to the merger, and after Alexion shareholders formally backed the deal earlier this month.

The approval by the US Federal Trade Commission (FTC) came without drama last month, to the surprise of some market watchers who had speculated that it could have a bumpy road in the midst of a crackdown by the regulator on large biopharma transactions.

That could bode well for a smooth passage through the CMA review, and AZ has said it hopes to complete the acquisition sometime in the third quarter of this year.

The big pharma announced the deal last December, after a couple of years in which Alexion had been repeatedly mentioned as one of the top takeover prospects in the biotech sector.

AZ eventually agreed to pay $60 in cash and assign 2.12 of its US-listed shares for each Alexion share, a total value of $175 per share that analysts at SVB Leerink said was a fair price for a "scarce and high-quality asset".

The takeover – something of a departure from AZ's recent deal-making in oncology – would bolster AZ's immunology franchise with $4 billion rare disease therapy Soliris (eculizumab) and longer acting follow-up Ultomiris (ravulizumab), along with a pipeline of 11 other drugs for rare and autoimmune diseases.

New indications for Ultomiris dominate Alexion's near-term pipeline, but other Phase 3 candidates include ALXN1840 for genetic disorder Wilson disease – with a readout due in the third quarter – as well as CAEL-101 for light chain amyloidosis, AG10 for ATTR cardiomyopathy and ALXN2040 for paroxysmal nocturnal haemoglobinuria (PNH) patients with extravascular haemolysis (EVH).