Drug manufacturing giant AstraZeneca PLC (NASDAQ: AZN) has agreed to purchase the outstanding shares of TeneoTwo, Inc. for approximately $100 million. TeneoTwo, a subsidiary of TBio, LLC, is known for TNB-486.
The American Depository Receipts (ADRs) of this $203-billion company slipped approximately 1% in the pre-market trading session on Tuesday.
Inside the Headlines
It is worth noting that TNB-486 is a T-cell engager (in the clinical stage), which can be used for killing cancer cells by directing T-cells in the immune system. TNB-486 is being evaluated for the treatment of lymphoma.
The addition of TNB-486 will boost AstraZeneca’s efforts to build more drugs to address blood cancer.
The Senior Vice-President of Haematology R&D at AZN, Anas Younes, said, “We believe this innovative molecule, which was designed to optimize the therapeutic window of T-cell activation, will enable us to explore novel combinations that have the potential to become new standards of care in this setting.”
In addition to the upfront payment of $100 million, AstraZeneca might consider making other payments to the shareholders of TeneoTwo if some R&D and commercial requirements are accomplished.
AstraZeneca forecasts the deal to conclude in the third quarter of 2022.
Wall Street’s Take
On TipRanks, AstraZeneca has a Moderate Buy consensus rating based on two Buys. AZN’s average price target is $77.50, reflecting upside potential of 17.51% from current levels. Over the past year, the ADRs of AstraZeneca have increased 10.1%.
A few days ago, Sachin Jain of Bank of America Securities reiterated a Buy rating on AZN with a price target of $80 (21.3% upside potential).
Bloggers’ Opinion
According to TipRanks, financial bloggers are 93% Bullish on AZN versus the sector average of 71%.
Conclusion
The buyout of TeneoTwo is expected to strengthen AstraZeneca’s fight against blood cancer. The buyout also has the potential to boost the company’s top-line prospects in the years ahead.
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