On December 26, 2023 AstraZeneca reported that it has entered into a definitive agreement to acquire Gracell Biotechnologies Inc. (Gracell, NASDAQ: GRCL), a global clinical-stage biopharmaceutical company developing innovative cell therapies for the treatment of cancer and autoimmune diseases, furthering the AstraZeneca cell therapy ambition.
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The proposed acquisition will enrich AstraZeneca’s growing 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).
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.
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 tumours. GC012F will accelerate our cell therapy strategy in haematology, with the opportunity to bring a potential best-in-class treatment to patients living with blood cancers using a differentiated manufacturing process, as well as exploring the potential for cell therapy to reset the immune response in autoimmune diseases."
Dr. William Cao, founder, Chairman and CEO, Gracell, said: "We look forward to working with AstraZeneca to accelerate our shared goal of bringing transformative cell therapies to more patients living with debilitating diseases. By combining our expertise and resources, we can unlock new ways to harness the Gracell FasTCAR manufacturing platform, which we believe has the potential to optimise the therapeutic profile of engineered T cells, to pioneer the next generation of autologous cell therapies."
Gracell will operate as a wholly owned subsidiary of AstraZeneca, with operations in China and the US.
Financial considerations
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 $1.0bn, a 62% premium to Gracell’s closing market price on 22nd December 2023 and a 154% 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 $1.2bn, an 86% premium to Gracell’s closing market price on 22nd December 2023 and a 192% 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 $234.1m as of 30th 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. The transaction does not impact AstraZeneca’s financial guidance for 2023.
Notes
About GC012F
GC012F is Gracell’s FasTCAR-enabled BCMA/CD19 dual-targeting autologous CAR-T cell therapy, which aims to transform cancer and autoimmune disease treatment by seeking to drive deep and durable responses with an improved safety profile. GC012F is currently being evaluated in clinical studies in multiple haematologic malignancies and autoimmune diseases. Gracell has initiated a Phase Ib/II trial evaluating GC012F for the treatment of relapsed or refractory multiple myeloma in the US.