AstraZeneca has struck a deal to buy a Chinese cancer therapy company for up to $1.2bn (£950m), as Britain’s biggest drugmaker expands its footprint in its second-largest market.
The Anglo-Swedish pharmaceutical firm announced on Tuesday it would acquire Gracell Biotechnologies, which is focused on a type of cancer therapy known as CAR-T that modifies a patient’s cells to fight the disease.
The deal marks a further investment in cancer research and treatment, which accounts for about one-third of AstraZeneca’s business, as well as its continued push to expand in China.
AstraZeneca, which is one of the largest stock market-listed companies in London, made 13% of its revenues – about $6bn of $44bn – in the country last year, making it the second-most lucrative market behind the US, where revenues totalled $18bn.
China’s growing importance to the drugs giant was underlined this summer, when it emerged that AstraZeneca was considering spinning off its local business, and listing it in Hong Kong or Shanghai, to avoid being caught up in the fallout from increasing tensions between China and the US and its allies. A spokesperson at the time declined to comment on speculation.
The company is not only trying to exploit a growing client base in China, but is increasingly striking deals with local firms that can expand its drug offerings in other markets.
Its acquisition of Gracell is AstraZeneca’s second tie-up with a Chinese firm in two months, after it struck a deal to develop a weight-loss pill with the Chinese biotech firm Eccogene in November.
It paid $2 a share for Gracell, marking a 62% premium on its closing price on the Nasdaq exchange in the US on Friday. The company will operate as a wholly owned subsidiary of AstraZeneca, with operations in China and the US.
The deal could be worth as much as $1.2bn if certain regulatory milestones are hit, which would trigger additional share purchases.
AstraZeneca said in a statement that Gracell’s technology would complement the company’s existing work in cell therapy and was an “opportunity to bring a potential best-in-class treatment to patients living with blood cancers using a differentiated manufacturing process, as well as exploring the potential for cell therapy to reset the immune response in autoimmune diseases”.
AstraZeneca became a household name during the pandemic, as it developed a Covid vaccine in conjunction with Oxford university. It agreed its first acquisition of a vaccine company earlier this month, buying the Seattle-based Icosavax for $1.1bn.
