AstraZeneca Bolsters Cell Therapy Pipeline with $1.2 Billion Gracell Acquisition

AstraZeneca (LON: AZN) announced an agreement to acquire Gracell Biotechnologies (NASDAQ: GRCL), a clinical-stage cell therapy company, for up to $1.2 billion on Wednesday, further strengthening its ambitions in the field of autoimmune diseases.

The deal, expected to close in the first quarter of 2024, will see AstraZeneca buy the Chinese company in a deal that represents a 62% premium to Gracell's closing price on December 22nd and a 154% premium to its 60-day VWAP.

The acquisition will see AZN acquire Gracell's GC012F, a novel autologous CAR-T therapy targeting both BCMA and CD19 antigens.

“The proposed acquisition of Gracell will complement AstraZenecaÕs 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,” said Susan Galbraith, EVP of Oncology R&D at AstraZeneca.

“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..”

For Gracell, the deal signifies a step towards its mission of delivering transformative cell therapies. “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.,” said Dr. William Cao, Gracell's founder, Chairman, and CEO.

Gracell will operate as a wholly-owned subsidiary of AstraZeneca, retaining its operations in China and the US.

Following the initial news release on Tuesday, analysts at Piper Sandler downgraded shares of GRCL to Neutral from Overweight, lifting the price target to $10 from $9 per share to reflect the deal. Elsewhere, Reuters reported that an H.C. Wainwright analyst speculated that the move by AstraZeneca could be the company's way of moving more into the cell therapy space as it is currently not as heavily involved, unlike Novartis and Gilead.