E AstraZeneca To Buy ZS Pharma For $2.7 Billion

Today AstraZeneca (AZN) announced that it will acquire ZS Pharma (ZSPH) for $2.7 billion. According to the deal, AZN will acquire ZSPH for $90 per share in an all cash transaction, which is a 40% premium to ZS Pharma’s closing share price on Thursday. The reason for this buyout is because of the opportunity for AstraZeneca to bolster its cardiovascular pipeline as it faces a huge patent exclusivity loss in the U.S. for Crestor. 

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Crestor is AstraZeneca’s best selling cholesterol lowering drug. Now the company was looking for an acquisition that might help keep its cardiovascular pipeline going. The acquisition today adds a drug from ZS Pharma’s pipeline known as ZS-9, which treats high potassium levels in the blood — hyperkalemia. Right now the FDA is reviewing this drug and a possible decision for approval may come by May 26 of 2016. 

If ZS-9 is ultimately approved by the FDA many analysts are expecting it to generate up to $1 billion dollar in sales annually. Even if ZS-9 is approved AstraZeneca doesn’t expect to generate revenue from the drug until late 2016.