Alexion Pharmaceuticals will pay a huge premium to buy Synageva BioPharma in an $8.4-billion deal for a rare disease treatment maker that lost nearly $60 million in the first quarter and has no products on the market.
Shares of ALXN fell 8% on the news. But investors of the buyout target saw a huge payday — a GEVA blastoff of 112.2%. That was a gain of about $108, to $203.39 a share.
Alexion said it will pay $115 in cash and a portion of its stock for each Synageva share. That puts the total per-share price at about $226, based on the Tuesday closing price of Alexion shares.
That’s a premium of about 136% to Synageva’s $95.87 closing price on Tuesday.
Alexion made the deal, announced Wednesday morning, more for what Synageva can offer rather than what it already provides. That includes access to a potential blockbuster drug and stronger footing in lucrative field where drugmakers can command top dollar for treatments without facing fierce negotiations from insurers and other payers.
Synageva’s pipeline of products under development includes Kanuma, a potential treatment that’s currently being reviewed by the Food and Drug Administration, which is expected to decide by September whether to approve it. Kanuma treats lysosomal acid lipase deficiency, a disease that causes the buildup of fatty material in the liver and blood vessels and can cause serious health problems or death.