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Big Pharma: Alexion buys Synageva

By Tim Sandle     May 7, 2015 in Business
Pharma company Alexion, which specializes in rare disease research, has purchased a smaller drug developer, Synageva biopharmaceuticals, for over $8 billion.
The objective of the purchase, according to PharmaFile, is to bring together research in rare diseases and initial drug development. Combined the two companies have 8 potential medicines that can treat 11 different rare diseases. To add to this, some 30 other drugs are under research.
A disease or disorder is defined as rare in Europe when it affects fewer than 1 in 2000. A disease or disorder is defined as rare in the U.S. when it affects fewer than 200,000 Americans at any given time, according to Digital Journal.
The main Alexion product is a drug called Soliris (generic name eculizumab). This is used to treat two very rare diseases called paroxysmal nocturnal haemoglobinuria (PNH) and atypical haemolytic uraemic syndrome (aHUS). The drug is approved for use in the U.K. for use with up to 30 patients per year. The drug is very valuable, with sales in first quarter of 2014 hitting $600 million. The drug has brought in $2 billion in revenues to date.
Synageva’s most lucrative product is Kanuma, (generic name sebelipase alfa). This drug treats the rare genetic disease Lysosomal Acid Lipase Deficiency (LALD). Apporval is underway in Europe and Japan for this product to be used more widely.
The $8.4 billion deal comes with a share valuation of $230. The new company expects to make cost savings (through synergies of scale) at around $150 million by 2017.
The merger between Alexion and Synageva is expected to complete by the end of the summer 2015. The deal far exceeds the previous deal between pharmaceutical and biotech companies in relation to rare disease, which was Shire’s purchase of NPS Pharma for $5.2 billion.
In related news, Israel-based pharmaceutical company Teva makes an unsolicited offer for a smaller, Netherlands-based rival called Mylan, as its main product faces competition from generics.
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