AstraZeneca Bolsters Cell Therapy Pipeline With Over $1B Deal For China-Based Gracell Biotechnologies

AstraZeneca Plc AZN has agreed to acquire Gracell Biotechnologies Inc GRCL, further strengthening AstraZeneca's cell therapy portfolio.

The deal value is $2.00/share (equivalent to $10/ADS ADS of Gracell) plus a non-tradable contingent value right of $0.30/share (equivalent to $1.50/ADS of Gracell) in cash.

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

Gracell has initiated a Phase 1b/2 trial evaluating GC012F for relapsed or refractory multiple myeloma in the US.

Autologous CAR-T is a type of cell therapy created by reprogramming a patient's immune T cells to target disease-causing cells. 

Susan Galbraith, Executive Vice President, Oncology R&D, AstraZeneca, said: "The proposed acquisition of Gracell will complement AstraZeneca's existing capabilities and previous investments in cell therapy, where we have established our presence in CAR-T and T-cell receptor therapies (TCR-Ts) in solid tumors."

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

The upfront cash portion of the consideration represents a transaction value of approximately $1.0 billion, a 62% premium to Gracell's closing market price on 22 December 2023, and a 154% premium to the 60-day volume-weighted average price 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.

The transaction is expected to close in the first quarter of 2024.

Price Action: GRCL shares are up 63.3% at $10.11 during the premarket session on the last check Tuesday.