Alexion Acquires Synageva for $8.4 Billion

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By Jacob Maslow

Alexion Research Lab
Alexion research Lab

Alexion Pharmaceuticals (NASDAQ:ALXN) announced on Wednesday that it has acquired Synageva Biopharma (NASDAQ:GEVA) for $8.4 billion. The acquisition is an attempt to expand the company’s treatment offerings for rare diseases.

The deal, which involves cash and stock, gives Synageva a value of $230 a share, which is 140% higher than Synageva’s average closing price of $95.87. The $230 figure is based on the Alexion’s average closing price over the last nine days.

Alexion is one of the most successful marketers of treatments for rare genetic diseases. These so-called “orphan drugs” are incredibly expensive.

The company’s best-selling drug is Soliris, which costs patients $500,000 a year. The drug treats only a small number of patients with a very rare blood disorder. Sales for the drug rose 44% last year to $2.2 billion. The company’s market value is $33 billion.

The acquisition of Synageva allows Alexion to expand its rare disease drug business, but it comes at a high price. Right now, Synageva’s most advanced drug is Kanuma, which treats LAL-Deficiency. This rare inherited disease is diagnosed in infants and is deadly. Kanuma is currently under review in both Europe and the United States. Approval decisions are expected in the second half of 2015.

Alexion shares were down in pre-market trading 2.4% to $164.50.

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