AstraZeneca to buy China's Gracell Biotechnologies in $1.2 bln deal (updated)

Gracell Biotechnologies

26/12/2023 09:58

(Adds premarket stock move in paragraph 3, background in
paragraphs 7 & 8)
       Dec 26 (Reuters) - AstraZeneca  AZN.L  said on Tuesday
it will buy Gracell Biotechnologies  GRCL.O  for up to $1.2
billion as the Anglo-Swedish pharma company furthers its cell
therapy ambitions and boosts its presence in China, the world's
second-largest pharmaceuticals market.
    The cash deal, which adds several experimental therapies to
AstraZeneca's portfolio, values Gracell at $2 per ordinary
share, or $10 per ADS of Gracell, plus a non-tradable contingent
value right of $0.30 per ordinary share, if certain regulatory
milestones are met.
        Shares of China-based Gracell surged 65% in premarket
trading in the United States. AstraZeneca is one of the biggest
drugmakers in the Asian country, which accounted for 13% of the
company's total sales in 2022.
    "The proposed acquisition of Gracell will complement
AstraZeneca's existing capabilities and previous investments in
cell therapy, where we have established our presence in CAR-T
and T-cell receptor therapies in solid tumours", AstraZeneca's 
Oncology R&D Vice President Susan Galbraith said in a statement.
    Autologous CAR-T is a cell therapy created by reprogramming
a patient's immune T-cells, a key part of the body's immune
response, to target disease-causing cells. Gracell's FasTCAR
platform enhances T-cell fitness and could potentially improve
the effectiveness of treatment in patients.
    AstraZeneca will also acquire Gracell's cash, cash
equivalents and short-term investments of $234.1 million as of
Sept. 30, 2023. The deal is expected to close in the first
quarter of 2024, according to the statement.
    Last month, AstraZeneca agreed to a licensing deal for an
experimental anti-obesity pill from China's Eccogene, and in
August it announced a contract manufacturing deal with CanSino
Biologics for its messenger RNA technology vaccine program.
    AstraZeneca signed three licensing deals with Chinese
companies, CEO Pascal Soriot said earlier this year.

 (Reporting by Urvi Dugar in Bengaluru; Editing by Sonia Cheema
and Nivedita Bhattacharjee)
 ((UrviManoj.Dugar@thomsonreuters.com;))