AstraZeneca and Quell in $2bn-plus deal

BY Fraser Tennant

In the latest of a series of deals involving emerging forms of cell therapy, Cambridge-based drugmaker AstraZeneca is to collaborate with biotechnology start-up Quell Therapeutics to develop cell-based treatments for autoimmune diseases.

Under the terms of the agreement, Quell will receive $85m upfront from AstraZeneca – which comprises a predominant cash payment and an equity investment – and is also eligible to receive over $2bn for further development and commercialisation milestones, if successful, plus tiered royalties.

The collaboration between AstraZeneca and Quell Therapeutics will develop multiple engineered T-regulator (Treg) cell therapies that have the potential to be curative in type 1 diabetes and inflammatory bowel disease indications.

“We are extremely pleased to have AstraZeneca on board as our first major partner,” said Iain McGill, chief executive of Quell Therapeutics. “This collaboration builds on our pioneering work to develop exquisitely engineered, multi-modular Treg cell therapies for immune disorders and provides excellent validation for the technologies and capabilities we have established.”

In addition, Quell’s proprietary toolbox of Treg cell engineering modules, including its innovative Foxp3 Phenotype Lock will be leveraged to develop autologous multi-modular Treg cell therapy candidates for major autoimmune disease indications.

“This is a very exciting collaboration with Quell as we look to expand our next-generation therapeutic toolbox and explore the untapped potential with Treg cell therapies in autoimmune indications,” said Mene Pangalos, executive vice president of BioPharmaceuticals R&D at AstraZeneca. “This is aligned with our strategy to target underlying disease drivers to stop or slow disease progression and ultimately accelerate the delivery of transformative care to patients with chronic autoimmune conditions.”

A global, science-led biopharmaceutical company that focuses on the discovery, development and commercialisation of prescription medicines in oncology, rare diseases and biopharmaceuticals, AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide.

Mr McGill concluded: “We are proud and excited to partner our leading science with the deep experience of AstraZeneca to accelerate the application of our Treg cell therapy platform in major autoimmune disease, where we believe there is a broad opportunity to reset immune tolerance and drive durable responses for patients.”

News: AstraZeneca signs $2 billion agreement with Quell to develop cell therapies

Novartis to acquire Chinook for $3.2bn

BY Richard Summerfield

Pharmaceutical firm Novartis has agreed to buy clinical stage biopharmaceutical company Chinook Therapeutics in a deal worth up to $3.5bn.

The transaction values Seattle-based Chinook at $40 a share, compared to Friday’s closing price of under $24, a premium of 67 percent. The agreement includes another $300m if certain regulatory milestones are reached. The deal is subject to approval from the stockholders of Chinook and regulatory clearances and will conclude in the second half of 2023. The transaction has been unanimously approved by the boards of directors of both companies.

The deal is a merger of a newly formed subsidiary of Novartis with Chinook, which has two late-stage medicines currently under development to treat IgA nephropathy (IgAN), a rare, progressive chronic kidney disease.

Novartis is pursuing Chinook to take control of two late-stage drug candidates. The most advanced of the assets is atrasentan, an oral endothelin A receptor antagonist that Chinook picked up from AbbVie in 2019 in a deal worth up to $135m in milestones.

“IgA Nephropathy is a devastating disease mostly affecting young adults and potentially leading to dialysis or kidney transplantation,” said Vas Narasimhan, chief executive of Novartis. “We are excited by this unique opportunity to address one of society’s most challenging healthcare issues, with the potential to bring additional much-needed treatment options to patients. We look forward to closing the deal, to a smooth transition for Chinook employees and to welcoming them to Novartis.”

“We are pleased that Novartis recognizes the significant value that the Chinook team has built with our pipeline of clinical and preclinical programs for patients with rare, severe chronic kidney diseases,” said Eric Dobmeier, president and chief executive of Chinook Therapeutics. “We believe this transaction is great news for kidney disease patients and the programs we have built at Chinook. Through this merger, Novartis can apply its substantial resources to pursue broader development efforts and commercialization of atrasentan, zigakibart (BION-1301) and other programs in our pipeline to build its global renal therapeutic area.”

News: Novartis to buy Chinook for up to $3.5 bln in boost to late-stage pipeline

Data centre operator Cyxtera files for Chapter 11

BY Fraser Tennant

In a bid to put itself on a more solid financial footing, data centre operator Cyxtera Technologies Inc. and certain of its subsidiaries has filed for Chapter 11 bankruptcy protection.

Cyxtera’s bankruptcy filing – which does not include its subsidiaries in Germany, Singapore and the UK – is pursuant to a previously disclosed restructuring support agreement (RSA) it reached with certain of its lenders holding over two-thirds of its outstanding term loan.

The company expects to use the Chapter 11 process to strengthen its financial position, meaningfully deleverage its balance sheet and facilitate the business’s long-term success.

In addition, Cyxtera has received a commitment for $200m in debtor-in-possession (DIP) financing from certain of the term lenders, which is convertible into an exit facility upon the company's emergence from the court-supervised process. This new financing is expected to provide sufficient liquidity to support Cyxtera during this process and beyond.

“We have thoroughly evaluated options to enhance value for the company and our stakeholders,” said Nelson Fonseca, chief executive of Cyxtera. “Together with our lenders, we determined that initiating this process is the best path forward for Cyxtera and our stakeholders as we pursue new opportunities for growth.

“We appreciate the significant support from our lenders, which will enable us to move through this process as quickly as possible,” he continued. “We are confident these steps will enable us to position our business for the long term as we continue serving our customers with innovative services and the highest levels of support.”

A global leader in colocation and interconnection services, with a footprint of more than 60 data centres in over 30 markets, Cyxtera provides more than 2300 enterprise and government customers with the technology solutions they need to scale faster, achieve financial goals and gain a competitive advantage.

“Our recent business momentum and the high demand for our global data centre platform are a testament to the hard work and commitment of our team, as well as to the continued support of our customers and business partners,” concluded Mr Fonseca. “We look forward to emerging from this process as a stronger organisation with additional financial flexibility to drive Cyxtera’s next phase of growth.”

News: Data-center operator Cyxtera files for bankruptcy

CIRCOR taken private in $1.6bn deal

BY Richard Summerfield

Private equity giant KKR & Co has agreed to take industrial machinery maker CIRCOR International Inc private in a deal worth $1.6bn.

Under the terms of the agreement, KKR will pay $49 per share, a premium of nearly 55 percent to CIRCO’s last closing stock price on Friday 2 June.

CIRCOR’s board has unanimously approved the transaction and recommended that shareholders vote in its favour. The deal is expected to close in the fourth quarter of 2023, subject to the receipt of approval from the company’s shareholders and certain required regulatory approvals, as well as the satisfaction of other customary closing conditions. Upon completion, CIRCOR will be a privately held company wholly owned by KKR’s investment funds and will no longer have its common stock listed on any public market.

“Our agreement with KKR marks the successful culmination of a strategic review process conducted by the Board, supported by external advisors and the management team,” said Helmuth Ludwig, chair of the board of CIRCOR. “As part of our comprehensive strategic review, initiated in March 2022, we engaged in extensive dialogue with a number of parties that expressed interest in acquiring all or parts of the Company. We believe that this transaction and the immediate cash value it will provide to CIRCOR’s stockholders best achieves the Board’s goal of unlocking the significant incremental value within CIRCOR for its stockholders. This transaction is a testament to the dedication of CIRCOR’s talented team and we are grateful for their tireless efforts and commitment to making CIRCOR an industry leader.”

“This transaction will create significant value to our stockholders, reflecting the dedication of our team in executing on our strategic priorities, the strength of our family of brands and the deep relationships we have built with our customers,” said Tony Najjar, president and chief executive of CIRCOR. “We believe that having the support and resources of an experienced investor like KKR will help us expand our presence in the flow control space and support our mission to deliver the highest-quality products and services to our customers, many of which play a critical role in protecting national security.”

“CIRCOR stands out as an innovative and trusted solution provider, manufacturing mission-critical flow control products for industrials, aerospace and defense customers,” said Josh Weisenbeck, a partner at KKR. “We believe the Company is in a strong position to grow and benefit from the attractive tailwinds in those markets. We look forward to working closely with Tony and his talented team to drive further growth and value through new product development, aftermarket expansion, strategic acquisitions and allowing all CIRCOR employees to have the opportunity to participate in the benefits of ownership of the Company.”

CIRCOR has around 3100 employees and manufactures pump and valve systems for sectors including oil & gas, industrial, aerospace and defence.

News: KKR to take machinery maker Circor private in $1.6-bln deal

Asda to acquire EG Group

BY Richard Summerfield

British supermarket chain Asda has agreed to acquire the UK operations of petrol station giant EG Group, which is also owned by the Issa brothers and TDR Capital, in a £2.27bn deal.

Under the terms of the deal, Asda will acquire 350 petrol stations and more than 1000 food-to-go sites. The company plans to roll out the Asda Express convenience format across the EG UK and Ireland estate.

Asda intends to invest more than £150m within the next three years to “fully integrate the combined business” with shareholders, providing £45m of additional equity to fund the transaction. Upon completion, the merged business will have almost £30bn sales with EG UK and Ireland contributing £195m earnings before interest, taxes, depreciation and amortisation (EBITDA) to the group after rents. Going forward, Asda expects to realise synergies of £100m over the next three years. The company also expects to find more than £100m of working capital benefits due to its larger scale.

“Asda’s acquisition of EG UK and Ireland will create a consumer champion like the UK has never seen,” said Stuart Rose, chair of Asda. “Throughout my career in retail – one thing has always been true, that meeting the evolving needs of customers is the route to growth. This transaction is all about driving growth by bringing Asda’s heritage in value to even more communities and accelerating the growth of its convenience retail business.”

“This transaction with Asda represents an important strategic step for EG Group,” said Zuber Issa co-founder and co-chief executive of EG Group. “Following this sale, EG Group will benefit from a significantly strengthened balance sheet, supporting the continued roll out of its successful convenience retail, fuel and foodservice strategy and drive innovation to transform the consumer experience. This includes the ongoing investment and expansion of our EV charging business, evpoint, as well as hydrogen and other sustainable fuel retail infrastructure, which we continue to see as a significant future opportunity.”

“The sale of the EG UK&I business to Asda makes strategic sense for both parties and will enable EG Group to accelerate its growth in key markets including Europe, the US and Australia,” said Gary Lindsay, managing partner at TDR Capital. “The Group has developed a successful blueprint in the UK for developing one-stop shop sites which combine convenience retail, fuel and foodservice and there are significant value creation opportunities from rolling out this model, across the global estate. The Group remains at the leading edge of developing the forecourts of the future, and its ongoing development of alternative fuels and EV charging infrastructure.”

The deal, which is expected to close in Q4 2023, will be funded by £450m of equity from Asda’s shareholders, including its former owner, US retail giant Walmart, £770m of term loan debt and around £1.1bn from property-related transactions, including the sale and leaseback of some of its stores.

News: UK's Asda to buy EG petrol stations unit in $2.9-bln deal