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AstraZeneca (AZN) to Buy TeneoTwo, Boost Hematology Pipeline

Zacks Equity Research
·4 min read

AstraZeneca AZN announced that it has entered into an agreement with TeneoTwo wherein it will acquire all the outstanding shares of the latter. Following the acquisition, TeneoTwo’s CD19/CD3 T-cell engager TNB-486 will be added to AstraZeneca’s pipeline.

TNB-486 is currently being evaluated in a phase I study for treating relapsed and refractory B-cell non-Hodgkin lymphoma.

The acquisition is expected to diversify AstraZeneca’s hematology pipeline that targets a wide range of blood cancer indications using diverse treatment methods.

Per the terms of the agreement, AstraZeneca will make an upfront payment of $100 million on the closure of the deal. In addition to the upfront payment, the existing shareholders of TeneoTwo will also be eligible to receive contingent R&D-related milestone payments of up to $805 million and additional contingent commercial-related milestone payments of up to $360 million.

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Shares of AstraZeneca have risen 13.2% in the year so far in comparison with the industry’s 5.4% rise.

Zacks Investment Research
Zacks Investment Research


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To treat hematologic malignancies and solid tumors, a T-cell engager is designed to redirect the immune system’s T-cells to recognize and kill cancer cells. TNB-486 is being developed to bind two proteins, CD19 and CD3, and activate T-cells to generate an immune response.

The acquisition deal was unanimously approved by the board of directors of both companies. The transaction, expected to be completed by third-quarter 2022, is subject to customary closing conditions and clearance from the regulatory authorities. Per AstraZeneca, the transaction will not impact its financial guidance for 2022.

AstraZeneca is highly focused on strengthening its oncology business. In first-quarter 2022, AZN generated $3.6 billion worth of total revenues from its Oncology business, reflecting a 25% year-over-year rise in the constant exchange rate, driven by a solid performance of newer medicines, such as Tagrisso, Lynparza, Imfinzi and Calquence. AZN is working to further strengthen this portfolio through label expansions and advancing oncology pipeline candidates. AZN aims to develop a treatment for every form of cancer.

AstraZeneca PLC Price

AstraZeneca PLC Price
AstraZeneca PLC Price

AstraZeneca PLC price | AstraZeneca PLC Quote

Zacks Rank & Stocks to Consider

AstraZeneca currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the overall healthcare sector are Merck MRK, Novo Nordisk NVO and Sesen Bio SESN. While Novo Nordisk and Sesen Bio each sport a Zacks Rank #1 (Strong Buy) at present, Merck carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Estimates for Sesen Bio’s 2022 bottom line have declined from a loss of 46 cents to 44 cents in the past 60 days. Share prices of Sesen Bio have fallen 2% in the year-to-date period.

Earnings of Sesen Bio beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 69.9%. In the last reported quarter, Sesen Bio delivered an earnings surprise of 100%.

Estimates for Novo Nordisk’s 2022 bottom line have increased from $3.38 to $3.52 in the past 60 days. Estimates for 2023 have increased from $3.91 to $4.24 in the past 60 days. Share prices of Novo Nordisk have declined 0.3% in the year-to-date period.

Earnings of Novo Nordisk beat estimates in each of the last four quarters, the average surprise being 7.6%. In the last reported quarter, Novo Nordisk delivered an earnings surprise of 10.6%.

Estimates for Merck’s 2022 bottom line have increased from $7.28 to $7.32 in the past 60 days. Share prices of Merck have risen 20.6% in the year-to-date period.

Earnings of Merck beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 13.4%. In the last reported quarter, Merck delivered an earnings surprise of 18.2%.


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