AstraZeneca to buy China’s Gracell Bio for up to $1.2 billion

London: AstraZeneca said on Tuesday it will buy Gracell Biotechnologies for up to $1.2 billion as the Anglo-Swedish pharma company furthers its cell therapy ambitions and boosts its presence in China, the world’s second-largest pharmaceuticals market.

The cash deal, which adds several experimental therapies to AstraZeneca’s portfolio, values Gracell at $2 per ordinary share, or $10 per ADS of Gracell, plus a non-tradable contingent value right of $0.30 per ordinary share, if certain regulatory milestones are met.

Shares of China-based Gracell surged 65% in premarket trading in the United States. AstraZeneca is one of the biggest drugmakers in the Asian country, which accounted for 13% of the company’s total sales in 2022.

“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-Tand T-cell receptor therapies in solid tumours,” AstraZeneca’sOncology R&D Vice President Susan Galbraith said in a statement.

Autologous CAR-T is a cell therapy created by reprogramming a patient’s immune T-cells, a key part of the body’s immune response, to target disease-causing cells. Gracell’s FasTCAR platform enhances T-cell fitness and could potentially improve the effectiveness of treatment in patients. AstraZeneca will also acquire Gracell’s cash, cash equivalents and short-term investments of $234.1 million as of Sept. 30, 2023.