The biopharmaceutical industry is still in a capital winter period, and there is an increasing trend of mergers and acquisitions in the industry.
On December 26, 2023, AstraZeneca announced that it had reached an agreement with GRCL. US to acquire the latter for a total price of approximately $1.2 billion.
Genxi Biotechnology is a Chinese biotechnology enterprise listed on NASDAQ, mainly engaged in the development of cell therapy drugs. This will also become the first Chinese biotechnology enterprise to be fully acquired by a multinational pharmaceutical company.
The total acquisition price this time is 86% higher than the closing price of Genxi Biotechnology on December 22, 2023. If this acquisition is completed, Genxi Biotechnology will operate as a wholly-owned subsidiary of AstraZeneca in China and the United States. The transaction is expected to be completed in the first quarter of 2024.
AstraZeneca stated that the proposed acquisition will add GC012F CAR-T cell therapy to the company's expanding cell therapy pipeline. GC012F, built on the FasTCAR technology platform, is an innovative BCMA/CD19 dual target autologous chimeric antigen receptor T cell therapy (CAR-T) in the clinical stage, which is expected to become a next-generation treatment plan for multiple myeloma, other types of malignant hematological tumors, and autoimmune diseases (including systemic lupus erythematosus).
Currently, due to the low point of the capital market, it poses great challenges for biotech companies to refinance, which is not conducive to the subsequent research and commercialization of their pipelines. As of September 30, 2023, the total amount of cash and securities on Genxi Biotechnology's balance sheet was $234 million. Although this portion of funds can still maintain the company's operations in the short term, it still appears to be struggling to afford expensive global multicenter clinical trials in the long term. In addition, there are currently four CAR-T cell therapy drugs listed in China, and the industry competition is fierce. Due to high production costs and high prices, the commercial expansion of these drugs is still not easy.
For Genxi Biotechnology, its CAR-T cell therapy drug products are still under research, and selling them to mature pharmaceutical companies at this time may be a good choice.
Recently, AstraZeneca has also been increasing cooperation with local biotechnology companies in China.
Prior to this acquisition, in November 2023, AstraZeneca also announced that it had reached an exclusive licensing agreement with Chinese biotech company Chengyi Biotech for the development and commercialization of the small molecule GLP-1 receptor agonist ECC5004, obtaining exclusive rights to ECC5004 for all indications in countries and regions outside of China. This is the largest transaction reached in AstraZeneca China's early clinical project authorization license, with the company's cumulative expenditure exceeding $2 billion.
"When capital was rising, it was particularly difficult for you to collaborate with people. Now, after the cold winter of capital, it has become easier to collaborate with people, which is not a bad thing. I think for a large pharmaceutical company, opportunities are everywhere now. We are also actively financing and seeking cooperation. AstraZeneca's global scientists are constantly coming to China, and there are still 5 to 10 scientists looking for projects everywhere in China at this time." This September, Wang Lei, Global Executive Vice President, International Business and China President of AstraZeneca, once said in an interview with First Financial.