Alexion inks deal to acquire Achillion for $930M upfront

Alexion has struck a deal to buy Achillion for $930 million upfront. The takeover will give Alexion two clinical-phase medicines in development in complement alternative pathway-mediated rare diseases.

Achillion, once a high-flying hepatitis C player, is now focused on the development of oral small-molecule factor D inhibitors in indications such as paroxysmal nocturnal hemoglobinuria (PNH) and C3 glomerulopathy. That puts Achillion on the same turf as Alexion, which has grown into a substantial business by treating complement-mediated diseases such as PNH.

While the companies are targeting an overlapping set of diseases, Alexion thinks there are enough differences in their approaches to make the acquisition of Achillion worthwhile.

“Targeting a different part of the complement system—the alternative pathway—by inhibiting factor D production addresses uncontrolled complement activation further upstream in the complement cascade, and importantly, leaves the rest of the complement system intact, which is critical in maintaining the body’s ability to fight infection,” Alexion CEO Ludwig Hantson said in a statement.

Based on those differences, Hantson thinks Achillion’s approach could benefit patients with diseases that C5 inhibitors such as Soliris are unable to treat.  

To acquire Achillion, Alexion has put together a deal worth $930 million upfront. The deal amounts to a more than 70% premium over Achillion’s share price at the close of trading yesterday. Alexion has further sweetened the deal by offering contingent value rights tied to future milestones. 

Achillion stockholders stand to receive $1 per share if the FDA approves danicopan, an oral factor D inhibitor that is in phase 2 development in PNH. The phase 2 is testing danicopan in patients who have suboptimal responses to Alexion’s Soliris.

Alexion will pay out another $1 a share when ACH-5228 enters phase 3. Achillion presented top-line data on ACH-5228, a second-generation oral factor D inhibitor  in July.

By adding those assets to its pipeline, Alexion will further the pipeline diversification strategy that Hantson has overseen since taking over as CEO. Last week, Alexion paid $30 million for the chance to co-develop a primary mitochondrial myopathy drug in phase 3 development at Stealth BioTherapeutics.