AstraZeneca has agreed to buy US company Ardea Biosciences for $1.26bn (£782.31m), giving it a new gout drug to bolster its weak pipeline in a deal that fuels a wave of M&A in the biotechnology sector.
The $32-a-share acquisition - a 54 per cent premium to Ardea's closing price - is worth $1bn after deducting the existing cash held by Ardea, the companies said.
The main asset secured by AstraZeneca is an experimental drug called lesinurad, or RDEA594, that is in final-stage Phase III clinical tests for treating chronic hyperuricaemia in patients with gout.
AstraZeneca and Ardea said they expected the transaction to close in the second or third quarter, adding that shareholders representing around 30 percent of Ardea had agreed to vote in favour of the deal.
AstraZeneca is facing competition from cheap generic versions of several key drugs, including its big-selling antipsychotic Seroquel, at a time when its own pipeline of new medicines is relatively barren.
Earlier this month Britain's second-biggest drugmaker also signed a collaboration deal to jointly develop and sell five biotech drugs currently in Amgen's developmental pipeline.
AstraZeneca is more desperate for new products than many of its rivals but other Big Pharma companies are also scouring the biotech landscape looking for bargains - especially in cases where biotech stocks have underperformed recently.
GlaxoSmithKline said last week it had offered to buy Human Genome Sciences for $2.6bn, in a bid rejected by the US firm, while Roche has tried unsuccessfully to buy Illumina for $6.8bn.
At the same time, Amylin Pharmaceuticals, which spurned a $3.5bn takeover bid from Bristol-Myers Squibb, has started reaching out to potential buyers, according to sources familiar with the situation.
AstraZeneca has also been mentioned as a potential bidder for Amylin.