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AstraZeneca (AZN) shares gain on acquisition news

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A Dechra Pharmaceuticals scientist uses a microscope
Image: Dechra Pharmaceuticals

AstraZeneca (LSE: AZN) shares put on 3% in early trading Wednesday, after news of a new acquisition. The AstraZeneca share price is now up 18% over the past two years, and up 74% over five.

Via its Alexion subsidiary, the pharmaceuticals giant has agreed to buy out rare disease specialist Caelum Biosciences in a deal worth up to $500m. Alexion already held a minority interest in Caelum, with a full buyout option. It will now pay an initial $150m to take full control. Additional payments will reach up to $350m, depending on hitting regulatory and commercial milestones.

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AstraZeneca acquired Alexion itself only recently, with the deal completing in July 2021. The move marked a milestone in the company’s expansion into rare disease research.

Caelum has developed CAEL-101, a monoclonal antibody for the treatment of light chain (AL) amyloidosis. According to AstraZeneca’s description, “AL amyloidosis is a rare disease in which misfolded amyloid proteins build up in organs throughout the body, including the heart and kidneys, causing significant organ damage and failure that may ultimately be fatal.”

Astrazeneca pipeline addition

The company reckons that around 20,000 people across the UK, US and parts of Europe currently suffer from advanced stages of the disease. That’s a relatively small number in drug sales terms, so CAEL-101 is not going to be a big blockbuster. But it’s a significant number of patients, and the drug adds to the growing number of new treatments coming through AstraZeneca’s pipeline.

Phase III trials of the CAEL-101 antibody treatment will now take place. They will involve a total of 380 newly diagnosed AL amyloidosis patients, with enrolment currently underway.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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