Red Star Capital announced on December 27th that AstraZeneca China and GRCL. US announced yesterday that they have reached an acquisition agreement. Affected by the news of being acquired by AstraZeneca, Chinese concept stock Genxi Biotechnology rose 60.26% on Tuesday to $9.92 per share, with a total market value of $952 million.
The acquisition agreement shows that the down payment is approximately $1 billion, and if this down payment and potential contingent payments are made, the total transaction value is approximately $1.2 billion.
It is worth noting that this is also the first time in the history of a multinational pharmaceutical company acquiring a Chinese innovative pharmaceutical company. On December 27th, Cao Bo, an innovative pharmaceutical consultant, told Red Star Capital that unlike other companies developing CAR-T drugs, Genxi Biotech has a unique FasTCAR production technology platform in diseases such as lupus that have not yet made breakthroughs, opening up new possibilities for multinational pharmaceutical companies.
First case in history
The total transaction amount may reach 1.2 billion US dollars
On December 26, AstraZeneca China's official WeChat official account announced that it would acquire Genxi Biological, with a down payment of about $1 billion, which attracted wide attention in the industry. This means that Genxi Biotechnology will become the first biotech company in China to be acquired by a multinational pharmaceutical company.
It is reported that the cash down payment portion of the transaction consideration has a transaction value of approximately $1 billion, which is 62% higher than the closing price of Genxi Biotech on December 22, 2023, and 154% higher than the 60 day volume weighted average price (VWAP) of $3.94 before the announcement. If the down payment and potential contingent payments are made, the total transaction value would be approximately $1.2 billion, an 86% premium over Genxi Biotech's closing price on December 22, 2023, and a 192% premium over 60 day VWAP.
According to AstraZeneca China, the above-mentioned transaction is expected to be delivered in the first quarter of 2024.
Genxi Biotechnology is a global biopharmaceutical enterprise in the clinical stage. Among the 5 product pipelines displayed on its official website, GC012F has made the fastest progress. This drug is an innovative BCMA/CD19 dual target autologous chimeric antigen receptor T (CAR-T) cell therapy in the clinical stage, which is expected to become a new generation of treatment for multiple myeloma, other types of malignant hematological tumors, and autoimmune diseases (including systemic lupus erythematosus (SLE)).
Screenshot taken from the official website of Genxi Biology
Regarding autologous CAR-T cell therapy, the complex and lengthy production process is the main bottleneck facing the current cell therapy industry. Genxi Biotechnology has developed a targeted FasTCAR next-day production technology platform for this purpose.
The above-mentioned acquisition agreement includes BCMA/CD19 autologous CAR-T cell therapy for malignant hematological tumors and autoimmune diseases in the clinical stage, as well as a proprietary cell therapy production platform, which will further expand AstraZeneca's cell therapy pipeline.
Industry insider analysis:
Innovative development has more advantages than bundled research
On December 27th, Cao Bo, an innovative pharmaceutical consultant, told Red Star Capital that in the CAR-T drug field, Genxi Biotech's layout is different from other pharmaceutical companies.
In the past, CAR-T drugs were used as end-line treatments for tumors. Due to the complexity and long cycle of CAR-T drug development, for patients with complex conditions, it may increase some adverse reactions while ensuring certain effectiveness. But more importantly, there are already many CAR-T drugs in the final line of treatment in China, making it difficult to establish a foothold in this field. Cao Bo said.
From the perspective of the CAR-T pipeline under research by Genxi Biology, it focuses on the field of autoimmune diseases and has also made some arrangements in the treatment of lupus erythematosus. Moreover, Genxi Biotechnology has developed a proprietary cell therapy FasTCAR production technology platform for this purpose, which can shorten production time, enhance T cell health status, and thereby improve the potential effectiveness of autologous CAR-T therapy for patients.
According to Genxi Biotechnology, this technology also has the potential to be applied in the treatment of rare diseases in the future.
In this regard, Cao Bo believes that diseases such as lupus erythematosus that cannot be cured at present, Genxi Biotechnology's production technology platform is different from other pharmaceutical companies, making it more advantageous in the CAR-T drug race.
So, in the same field, especially when it comes to stagnant diseases, if pharmaceutical companies have innovative development or unique insights in this field, achieving breakthrough therapies, it will be much better than treating tumors in a pile. Being acquired by multinational pharmaceutical companies is a good way for Biotech in China to solve capital inflows and an opportunity to research and develop certain diseases, while for companies like AstraZeneca For large companies, acquiring a promising biotech company also enriches their competitive landscape among top multinational pharmaceutical companies Cao Bo said.
