Published: Sat, October 20, 2018
Medical | By

Novartis and Endocyte announce intention to merge

Novartis and Endocyte announce intention to merge

Novartis raised its outlook on Thursday, and announced it would acquire radiopharmaceuticals company Endocyte of the a deal that values it at $2.1 billion.

Since taking over in February, Narasimhan has shed over-the-counter medicines and generic pills while pushing a spinoff of Novartis's Alcon eyecare unit come 2019.

The latest deal comes shortly after Novartis agreed a $8.7bn deal to acquire AveXis, a United States specialist in spinal muscular atrophy (SMA). The company bought another company that works in the field, France's Advanced Accelerator Applications, for $3.9 billion previous year. Together, these acquisitions demonstrate Novartis' interest in expanding its Radioligand therapy portfolio.

Novartis reported third-quarter core net income rose two per cent to $3.1 billion, beating analysts' average forecast of $3 billion in a Reuters poll.

News of the latest bolt-on deal came as Novartis revealed a 6% rise in third-quarter sales to $12.8bn in constant currencies on the back of gains for new psoriasis drug Cosentyx (secukinumab) and Entresto (sacubitril/valsartan) for heart failure - up 37% to $750m and 113% to $271m, respectively - as well as Sandoz' biosimilar drugs. The companies said the offer represents a premium of 54% to $15.56 closing price of Endocyte stock on Wednesday.

Still, some analysts anxious Narasimhan waited too long.

The purchase is expected to give Novartis access to Endocyte's radioactive drugs that are used to treat tumors and hold significant sales potential.

Its small molecule drug conjugates are actively target receptors that are over-expressed on diseased cells.

"We are thrilled that Novartis recognizes the potential for 177Lu-PSMA-617 to change the treatment landscape for men with metastatic castration-resistant prostate cancer (mCRPC), as well as the broader role that RLTs may potentially play in the treatment of cancer", Endocyte CEO and president Mike Sherman said in the press release.

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