Drugmakers Alexion, Synageva in $8.4 billion deal

Alexion Pharmaceuticals will pay a huge premium to buy fellow rare disease treatment maker Synageva BioPharma in an $8.4-billion deal for a company with no products on the market.

Shares of Synageva more than doubled in value before markets opened Wednesday and after Alexion said it will pay $115 in cash and a portion of its stock for each Synageva share. That puts the total per-share price at about $226, based on the Tuesday closing price of Alexion shares.

That's a premium of about 136 percent to the $95.87 closing price Tuesday of Synageva BioPharma Corp. shares.

Lexington, Massachusetts-based Synageva booked a loss of nearly $60 million in the first quarter while bringing in only $927,000 in royalty revenue.

But its pipeline of drugs under development includes Kanuma, which is being reviewed by the Food and Drug Administration. Kanuma treats lysosomal acid lipase deficiency, a disease that causes the buildup of fatty material in the liver and blood vessels and can cause serious health problems or death.

The FDA is expected to decide on that treatment by September after granting it a priority review. A decision from European regulators is expected in the second half of the year as well.

Alexion officials said the deal will help their company accelerate and diversify its revenue growth and expand the drugmaker's manufacturing abilities.

Alexion Pharmaceuticals Inc. is based in Cheshire, Connecticut, and makes Soliris, which is approved to treat a rare, life-threatening blood disorder called paroxysmal nocturnal hemoglobinuria.

The boards of both companies have approved the deal, which is expected to close by the middle of the year. Alexion said it has lined up $3.5 billion in financing from Bank of America Merrill Lynch and J.P. Morgan for the deal.

Shares of Synageva were up 128 percent, or $123.13, to $219 about an hour before markets opened Wednesday. Alexion shares, meanwhile, slid 2 percent, or $3.55, to $165.

As of Tuesday's market close, Synageva's stock had climbed 3 percent so far this year, or about double the gain of the Standard & Poor's 500 index.