AstraZeneca makes $1.8bn move for CinCor Pharma

AstraZeneca has agreed to acquire pharmaceutical group CinCor Pharma in a deal worth a potential $1.8bn (£1.5bn), to bolster its heart and kidney medicines portfolio.

The biotech giant said it would spend about $1.3 billion, or $26 per share, on acquiring the Massachusetts-based company, representing a 121 percent premium over the stock’s closing price last Friday.

An additional $10 per share will be paid to investors subject to approval of a certain regulatory filing for Baxdrostat, a treatment for blood pressure and cardiorenal disorders.

In early November, results from a phase two trial, published in the New England Journal of Medicine, showed that the drug specifically reduced hypertension in patients who were resistant to other drugs.

It achieved this by restricting the development of aldosterone, a hormone used to regulate a body’s salt levels, in a test subject’s urine and blood.

However, the results of a separate study published three weeks later showed that Baxdrostat did not significantly lower blood pressure compared to a placebo.

As a result, CinCor’s shares plummeted by nearly half in one day. They remain just over a quarter below the company’s IPO of $16 per share in January 2022.

In total, London-listed AstraZeneca’s offer for CinCor is worth about 206 percent of the latter’s closing price on Friday.

Two more studies of Baxdrostat treatment are currently underway, with another Phase III trial set to begin sometime in the first half of this year.

AstraZeneca said it would eventually hope to combine the drug with Farxiga, one of its top-selling drugs and commonly used to treat type 2 diabetes and heart failure.

Mene Pangalos, the company’s executive vice president of biopharmaceutical research and development, said, “The acquisition of CinCor supports our commitment to cardiorenal disease and further strengthens our baxdrostat pipeline.

“Excessive levels of aldosterone are associated with hypertension and various cardiorenal diseases, including chronic kidney disease and coronary artery disease, and being able to effectively reduce these would provide a much-needed treatment option for these patients.”

AstraZeneca Shares were down 1 percent at 11,668p during early trading Monday, even though their value has grown about 40 percent over the past 12 months.

The latest deal from the FTSE 100 group comes as the JP Morgan Healthcare conference in California, the world’s largest annual gathering for the healthcare investment industry, is being held in person for the first time in three years.

Analysts are predicting a wave of deals in the pharmaceutical sector in 2023, given the relative underperformance of many biotech stocks over the past year.

Victoria Scholar, Interactive Investor’s Head of Investment, added that with the worsening global economic outlook, “investors are more risk averse and are looking to defensive sectors such as pharmaceuticals to weather the downturn.”