Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN)
Synageva BioPharma Corp (NASDAQ: GEVA)
Alexion Pharmaceuticals and Synageva BioPharma announced a definitive agreement today which will lead to the acquisition of Synageva by Alexion. Today, we’ll talk about the details of the acquisition, take a look at how investors are reacting on both sides, and discuss what we can expect to see in the future. So, let’s get right to it!
- For each share of GEVA stock, ALXN will pay $115 in cash and 0.651 ALXN shares.
- The total value of the acquisition is approximately $8.4 billion.
Statement from David Hallal, CEO of Alexion… “Synageva is an ideal strategic and operational fit for Alexion that aligns with what we know well and do well… providing life transforming therapies to an increasing number of patients with devastating and rare diseases…With strong ongoing Soliris growth in PNH and aHUS worldwide, and the anticipated 2015 global launches of Strensiq and Kanuma, we will accelerate and diversify our revenue growth. We are excited to create the most robust rare disease pipeline in biotech across a range of therapeutic modalities. Synageva is an outstanding company that shares Alexion’s commitment to serving patients with rare diseases, and together we will create increasing value for stakeholders.”
Statement From Sanj K. Patel, CEO of Synageva… “Alexion is uniquely suited to advance Synageva’s mission to deliver life-saving therapies to patients whose diseases were once considered too rare for developing treatments….As Kanuma moves closer toward patients who suffer from LAL Deficiency, and the other pipeline programs continue to progress, I am confident that this transaction will help continue and improve the lives of patients with LAL Deficiency and other devastating, rare diseases for years to come”
How GEVA And ALXN Investors Reacted
There are definitely mixed feelings revolving around this acquisition. It all depends on which side of the acquisition you are on…
- Synageva – If you’re on the GEVA side of the coin, you’re absolutely loving this acquisition. The reality is that ALXN is grossly overpaying for the acquisition; and GEVA shareholders will definitely benefit from that. Currently (1:46), GEVA is trading at $204.48 per share after a massive gain of 113.29% so far today.
- Alexion – If you’re on the ALXN side of the coin, chances are that you don’t like what you see. As mentioned above, ALXN is overpaying for GEVA; for details on that fact, click here. Nonetheless, investors aren’t happy; and we’ve seen declines in ALXN today. Currently (1:49), the stock is trading at $151.43 per share after a loss of 10.16% so far today.
What We Can Expect To See Moving Forward
Moving forward, I’m actually a fan of the acquisition. While I think it would have made more sense at a far lower sticker price, the long run benefits of the acquisition are clear. Both companies intertwine well and will most likely lead to stronger growth and more innovation as a conglomerate rather than competition. In the short run, we may see more declines from ALXN, but when looking at the long term, I think the good outweighs the bad with this one.
What Do You Think?
What do you think of the acquisition? We’d love to know your opinion below!