ZS Pharma becomes latest acquisition for the giant drug company.
The pharmaceutical industry has been in a deal-making frenzy, with many recent mergers and acquisitions. The latest deal involves a small California startup and a British drug giant that hopes to fend off competition as its blockbuster drug loses patent protections.
The UK-based drug maker Astra Zeneca announced last week that is buying the San Mateo, Calif., biopharmaceutical company ZS Pharma for $2.7 billion, according to the New York Times. Astra Zeneca epects the deal will boost its development of treatments for cardiovascular and metabolic diseases.
Next year, Astra Zeneca’s patent on its blockbuster cholesterol drug Crestor comes to an end, meaning the company will lose exclusive marketing rights and be forced to compete with cheaper generics. The British drug maker hopes the ZS Pharma purchase will bring new drugs to help maintain its market dominance in the cardiovascular drug sector.
ZS Pharma’s most well-known drug is called ZS 9, which can be prescribed for treating high potassium levels that can occur due to kidney disease or chronic heart failure. The drug is currently in end-stage clinical testing and is expected to be reviewed for FDA approval by next May.
In a news release, Astra Zeneca’s chief executive called the drug a “best-in-class treatment” that will add to the companies’ slate of cutting-edge pharmaceuticals. Sales of ZS 9 are predicted at more than $1 billion a year.
About 18 months ago, Astra Zeneca was the target of a takeover bid by the pharmaceutical giant Pfizer, the largest drug company in the U.S. That deal valued Astra Zeneca at over $100 billion, but Astra Zeneca executives and large shareholders blocked the deal, calling Pfizer’s top bid still too low for what they said was the companies’ value.
In addition to its other offerings, Pfizer was interested in Astra Zeneca’s development pipeline of some promising cancer drugs.
The purchase of ZS Pharma was unanimously approved by the company’s board. Astra Zeneca will pay $90 a share for the company, a 42 percent bump over the stock’s closing price last Thursday.
