AZ confirms talks with Acerta Pharma

AstraZeneca plc (AZN,AZN.L) is in advanced talks to acquire closely-held biotech company Acerta Pharma BV for more than $5 billion, the Wall Street Journal reported Friday, citing people familiar with the matter.

Acerta - which also has operations in California - reported results from a phase I/II trial of its lead candidate acalabrutinib (ACP-196) at the American Society of Hematology (ASH) conference in Orlando earlier this month.

The drug is a BTK inhibitor with a mode of action similar to AbbVie/Johnson & Johnson's blood cancer drug Imbruvica (ibrutinib), which is widely expected to rake in peak sales in excess of $5 billion. AstraZeneca, however, announced that negotiations were at a tentative stage and the two companies were yet to discuss terms.

In 2014, drugs for cancer reached worldwide sales of $79.2 billion, which was No. 1 amongst all areas of disease by sales.

Acerta does not yet have a partner to help develop its leading drug, although it has agreed to test acalabrutinib in combination with Merck's Keytruda. The cholesterol-lowering drug pulled in over $6.6 billion in sales previous year, and is due to go off-patent in the USA in January 2016. Last month, it scored USA regulatory approval for lung cancer drug, Tagrisso, which is being pegged as a $3 billion-a-year product.

The acquisition would allow AstraZeneca to refresh its drug pipeline, according to the Journal.

Since fighting off the Pfizer bid, AstraZeneca, which has an attractive portfolio of cancer drugs, has trumpeted the strength of its own drugs in development and has said it would be willing to pursue small to midsize deals to bolster its pipeline.