Pharma giant AstraZeneca agrees $2.7bn deal for United States firm ZS Pharma

Drug giant AstraZeneca (LON:AZN) has unveiled a US$2.7bn takeover bid for U.S. drug developer ZS Pharma, marking the latest move in a wave of M&A in the sector.

This acquisition complements our strategic focus on Cardiovascular and Metabolic Disease by adding a potential best-in-class treatment to our portfolio of innovative medicines, ” said, Pascal Soriot, CEO of AstraZeneca.

The Anglo-Swedish drugmaker announced in a statement this morning that it had agreed a deal to buy California-based ZS Pharma for $90 per share in an all-cash transaction, or approximately $2.7 billion in aggregate transaction value. The drug, called ZS-9, is undergoing review by US regulators, with a decision expected by May 26. Astra said the drug could generate peak annual sales of more than $1 billion. If approved the drug will give AZ another new product as it faces the impact of the loss of patent protection for its cholesterol-lowering drug Crestor (rosuvastatin) in the US.

ZS Pharma and its 200 employees across three sites in California, Texas and Colorado, will become a wholly owned subsidiary of AstraZeneca. The condition can result in chronic kidney disease or chronic heart failure.

Yesterday AstraZeneca raised its full-year revenue guidance after stronger-than-expected quarterly sales driven by its key heart treatment drug Brilinta. It will slightly erode profits over 2016 and 2017, before contributing to AstraZeneca’s core earnings from 2018.

Robert Alexander, chief executive of ZS Pharma, said the deal will help the company develop and commercialise the ZS-9 drug, as well as other treatments for cardiovascular and metabolic diseases.