AstraZeneca (NYSE:AZN) announced on Thursday that the company has purchased a 55% majority stake in Acerta Pharma. The company acquired the stake for $4 billion and will now be able to enter into a new market to help fight certain types of blood cancer.
The company will pay $2.5 billion upfront in cash with the remainder being paid by the end of 2018 or on the regulatory approval of Acalabrutinib.
Acalabrutinib is currently in the final stage of testing and works much like Imbruvica, which is a product jointly owned by AbbVie (NYSE:ABBV) and Johnson & Johnson (NYSE:JNJ). AstraZeneca believes that once the drug has passed the final testing stage and has been granted approval, it could reach more than $5 billion in sales.
CEO of the company, Pascal Soriot, said that the company has been trying to find ways to bolster its cancer business, and that the acquisition makes sense for the company.
The agreement to purchase the majority of Acerta stock also comes with the potential to buy the remaining 45% of shares from shareholders. Shareholders have the option to sell the remaining shares for $3 billion when acalabrutinib has been approved in Europe and the United States.
The drug is expected to be submitted for regulatory approval in 2016.