Dec 26, 2023 - Business

AstraZeneca buys China-based Gracell for $1.2B

Photo: Marcus Brandt/dpa (Photo by Marcus Brandt/picture alliance via Getty Images)

Anglo-Swedish pharma giant AstraZeneca will acquire China-based cell therapy biotech Gracell Biotechnologies for $1.2 billion.

Why it matters: AstraZeneca, one of the biggest drugmakers in China, reportedly plans to spin off its business in the region to protect itself from political tensions while retaining control of the business.

Details: The cash deal, expected to close in the first quarter of 2024, values Gracell at $2 per ordinary share, or $10 per American Depository Share, of Gracell.

  • The price represents a premium of 61.6% from Gracell's last close on Dec. 22.
  • AstraZeneca will also acquire Gracell's cash, cash equivalents and short-term investments of $234.1 million as of Sept. 30, 2023.

How it works: Leveraging CAR-T — which uses viral vectors to reengineer the body's cells to attack harmful cells — Gracell develops cell therapies for cancer and autoimmune diseases.

The big picture: The cell therapy space is currently dominated by players like Gilead Sciences, Novartis and Bristol Myers Squibb (which announced a $4.1 billion acquisition of cancer company RayzeBio Tuesday).

The intrigue: The Food and Drug Administration is investigating whether CAR-T immunotherapies can cause lymphoma in some patients after it received reports of serious adverse events in clinical trials and post-marketing studies.

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