AstraZeneca Plc’s shares fell to an eight-month low after agreeing to acquire Alexion Pharmaceuticals Inc. for $39 billion, according to Bloomberg. The deal raised questions over prospects of the company’s portfolio with investors believing there are few synergies with the existing portfolio.
- The acquisition of Alexion is expected to push AstraZeneca into new areas such as immunology, supplementing its core strengths in oncology
- Investors are increasingly concerned that the Alexion transaction potentially adds to the long-term risks AstraZeneca faces from patent expirations.
- The fall in the shares of AstraZeneca adds pressure to the company that already faces scrutiny over the efficacy of its potential COVID-19 vaccine on how the late-stage trials were handled
- Currently, AstraZeneca has $8 billion of cash in hand and its debt is 1.7 times its earnings, a lighter burden than the average for European high-grade companies.
- AstraZeneca is funding the Alexion deal in part through a $17.5 billion financing facility from Morgan Stanley, JPMorgan Chase & Co., and Goldman Sachs Group Inc.
AstraZeneca stock is currently losing as Alexion gains. AZN: LON is down 6.80%, ALXN: NASDAQ is up 32.19% on premarket.