Under the terms of the agreement, AstraZeneca will acquire all of Gracell’s fully diluted share capital through a merger for a price of $2.00 per ordinary share in cash at closing plus a non-tradable contingent value right of $0.30 per ordinary share in cash payable upon achievement of a specified regulatory milestone.

The upfront cash portion of the consideration represents a transaction value of approximately $1.0 billion, a 62% premium to Gracell’s closing market price on Dec. 22, 2023, and a 154% premium to the 60-day volume-weighted average price (VWAP) of $3.94 before this announcement. Combined, the upfront and potential contingent value payments represent, if achieved, a transaction value of approximately $1.2 billion, an 86% premium to Gracell's closing market price on Dec. 22, 2023, and a 192% premium to the 60-day VWAP.

Upon completion of the deal, Gracell will operate as a wholly owned subsidiary of AstraZeneca, with operations in China and the US.

The transaction is expected to close in the first quarter of 2024, subject to customary closing conditions, including regulatory clearances, and Gracell shareholder approval.

With the acquisition, AstraZeneca would enrich its pipeline of cell therapies with GC012F, a novel, clinical-stage FasTCAR-enabled BCMA and CD19 dual-targeting autologous chimeric antigen receptor T-cell (CAR-T) therapy, a potential new treatment for multiple myeloma, as well as other haematologic malignancies and autoimmune diseases including systemic lupus erythematosus (SLE).

Autologous CAR-T is a type of cell therapy created by reprogramming a patient’s immune T cells to target disease-causing cells, and the manufacturing process for this type of treatment is complex and time-consuming. Accordint to AstraZeneca, Gracell’s FasTCAR platform significantly shortens manufacturing time, enhances T-cell fitness, and will potentially improve the effectiveness of autologous CAR-T treatment in patients. Future applications of this technology may also include rare diseases.

Susan Galbraith, AstraZeneca’s executive vice president, Oncology R&D, said: “The proposed acquisition of Gracell will complement AstraZeneca’s existing capabilities and previous investments in cell therapy, where we have established our presence in CAR-T and T-cell receptor therapies (TCR-Ts) in solid tumors.”

William Cao, founder, chairman and CEO of Gracell, commented: “By combining our expertise and resources, we can unlock new ways to harness the Gracell FasTCAR manufacturing platform, which we believe has the potential to optimize the therapeutic profile of engineered T-cells, to pioneer the next generation of autologous cell therapies.”