AstraZeneca to acquire Gracell Biotechnologies

AstraZeneca has entered into a definitive agreement to acquire Gracell Biotechnologies, a global clinical-stage biopharma company developing innovative cell therapies for the treatment of cancer and autoimmune diseases.

The proposed acquisition will add to AstraZeneca’s pipeline of cell therapies with GC012F, a novel, clinical-stage FasTCAR-enabled BCMA and CD19 dual-targeting autologous chimeric antigen receptor T-cell (CAR-T) therapy, a potential new treatment for multiple myeloma, as well as other haematologic malignancies and autoimmune diseases including systemic lupus erythematosus (SLE).

A company statement informed, “Autologous CAR-T is a type of cell therapy created by reprogramming a patient’s immune T cells to target disease-causing cells, and the manufacturing process for this type of treatment is complex and time-consuming. The Gracell FasTCAR platform significantly shortens manufacturing time, enhances T cell fitness, and will potentially improve the effectiveness of autologous CAR-T treatment in patients. Future applications of this technology may also include rare diseases.”

Gracell will operate as a wholly owned subsidiary of AstraZeneca, with operations in China and the US.

Under the terms of the definitive agreement, AstraZeneca will acquire all of Gracell’s fully diluted share capital (including shares represented by ADSs) through a merger for a price of $2.00 per ordinary share in cash at closing (equivalent to $10.00 per ADS of Gracell) plus a non-tradable contingent value right of $0.30 per ordinary share (equivalent to $1.50 per ADS of Gracell) in cash payable upon achievement of a specified regulatory milestone.

The upfront cash portion of the consideration represents a transaction value of approximately $1.0 billion, a 62 per cent premium to Gracell’s closing market price on 22 December 2023 and a 154 per cent premium to the 60-day volume-weighted average price (VWAP) of $3.94 before this announcement. Combined, the upfront and potential contingent value payments represent, if achieved, a transaction value of approximately $1.2 billion, an 86 per cent premium to Gracell’s closing market price on 22 December 2023 and a 192 per cent premium to the 60-day VWAP. As part of the transaction, AstraZeneca will acquire the cash, cash equivalents and short-term investments on Gracell’s balance sheet, which totalled $234.1million as of 30 September 2023.

The transaction is expected to close in the first quarter of 2024, subject to customary closing conditions, including regulatory clearances, and Gracell shareholder approval.