(Reuters) – Alexion Pharmaceuticals Inc (ALXN.O) on Tuesday agreed to buy Portola Pharmaceuticals Inc (PTLA.O) in a $1.41 billion deal, as it looks to exploit smaller rival’s blood-thinning antidote which has reached only a tiny portion of its target population.
Portola’s shares more than doubled in morning trading to $17.82, hovering marginally below Alexion’s offer price of $18 per share. The shares had fallen 68% this year as of last close.
Supply shortages, narrow hospital targeting, and a lack of familiarity had limited the full potential of Portola’s drug, Alexion Chief Commercial Officer Brian Goff said about Andexxa, which was approved in 2018.
Alexion Chief Executive Officer Ludwig Hantson estimated that Andexxa, which reverses the affects of drugs Eliquis and Xarelto in cases of life-threatening or uncontrolled bleeding, had only reached 3% of its indicated patient population.
Fourth-quarter sales of the drug missed estimates due to slow uptake at certain hospitals.
For Alexion, which has been fighting to maintain its leadership in treating certain rare blood disorders, Portola’s addition to its recent string of acquisitions would further boost its treatment pipepline.
Alexion has worked closely with hospitals for its rare blood disorders drugs, Soliris and Ultomiris, and said it planned to use those relationships to expand access to Andexxa.
“We have those strong networks in the hospital, and we have a capability, as we’ve shown over the years, of market access,” said Chief Executive Officer Ludwig Hantson.
However, Wall Street remained cautious on the deal, as the COVID-19 pandemic has delayed visits to the doctor and canceled non-essential medical procedures.
“Accelerating the trajectory of Andexxa will truly be a “show me story”, and one that, in near term, could be at least modestly leveraged to the evolution of the COVID-19 pandemic,” said Stifel analyst Paul Matteis.
Last year, Alexion agreed to buy Achillion Pharmaceuticals Inc for $930 million. Before that, it had bought Sweden’s Wilson Therapeutics for $855 million and followed that up with the purchase of Syntimmune for a total value of up to $1.2 billion.
The drugmaker in December rejected Elliott Management’s push for a “proactive sale” process.
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