Today AstraZeneca (AZN) announced that it has bought a $4 billion stake in a private pharmaceutical company known as Acerta Pharma. The reason for this acquisition is for the company to boost its blood cancer product pipeline. Acerta’s blood cancer drug, known as Acalabrutinib, is used for the treatment of blood cancers. 

That drug is being made to replace other invasive therapies such as chemotherapy, and anti-body therapies. One thing to note is that AstraZeneca is not making one lump sum payment of $4 billion. Instead, it is going to pay an upfront payment of $2.5 billion, and the remaining $1.5 billion will come under either of two conditions, either:

In other words, it is which ever event occurs first. In addition AstraZeneca can buy the remaining stake, worth up to $3 billion thereafter, on the condition of the Acalabrutinib drug being approved first. Acerta is a biotech company based in Netherlands, and has a pipeline full of drugs in both the blood cancer space, and autoimmune diseases space.