Behind the deal: AstraZeneca's eagerness for CinCor acquisition revealed in larger initial offer

AstraZeneca kicked off this year’s J.P.Morgan Healthcare Conference in style, announcing a $1.8 billion deal that gave it ownership of CinCor Pharma and its mid-phase hypertension drug baxdrostat. But while Fierce Biotech reported at the time that AstraZeneca was able to exploit CinCor’s deflated share price, that was only part of the story.

A Securities and Exchange Commission filing released this week gives far greater insight into the dealings that went into the first major M&A deal of 2023. For starters, it turns out that in May 2021, before an acquisition was even suggested, AstraZeneca had put the feelers out for a potential deal to license baxdrostat alone. Those discussions petered out the followed month, with AstraZeneca noting that “in order to maximize the value of any proposal” it would need to see fresh data from two ongoing phase 2 trials of the drug: dubbed BrigHtn and HALO.

By Dec. 21, 2021, AstraZeneca was ready to up the stakes and submit an offer to buy the company outright for $700 million upfront, with the promise of up to $400 million in milestones—significantly less than the $1.3 billion upfront payment included in the final deal. Despite some back-and-forth, the two companies were unable to agree on terms, and the potential acquisition had fizzled out before the new year bell had even rung.

Fast forward to July 2022, when AstraZeneca got in touch with CinCor’s CEO Marc de Garidel for an update on the BrigHtn trial. It marked the prelude to AstraZeneca reopening negotiations, with the Big Pharma’s CEO Pascal Soriot himself “expressing strong interest” to de Gridel about the potential acquisition in late August.

Soriot meant what he said, putting up an offer of $54 per share to acquire CinCor. It not only marked a 53% premium on the biotech’s actual share price at the time but was double the $26 price that would ultimately be agreed upon.

The $54 price wasn’t enough for de Garidel, however, who pushed back at a meeting between the two companies’ execs at the European Society of Cardiology Congress in Barcelona just days later. By the following week, AstraZeneca had nudged up the offer to $60—a testament to how keen the Big Pharma was to get its hands on the biotech. Again, this wasn’t enough to satisfy de Garidel, who sketched out $66 as a price at which the company could do business. Soriot said this amount was "too high," but agreed to consider it.

Final negotiations ultimately settled around the $63 mark, with both sides heading in the right direction through October. But by then, AstraZeneca was making clear that it would need to see the HALO data before signing on the dotted line.

This was when events started turning against CinCor. The top-line HALO readout was published on Nov. 28, showing that baxdrostat had failed to meet the primary endpoint and almost halving CinCor’s share price.

Perhaps surprisingly, AstraZeneca was back in touch the following day to request a look at the data but, more importantly, reassure CinCor that it was still interested in a deal. With the tables turned in the Big Pharma’s favor, AstraZeneca was able to submit an offer price of $22 per share, along with contingent value right payments of $10 a share tied to regulatory milestones. De Garidel again pushed back with a $30 suggestion, but the two companies ultimately settled on $26 per share.