Novartis to acquire US cancer drugs maker Endocyte for $2.1 billion
19 October 2018
Swiss pharmaceutical giant Novartis on Thursday announced the signing of an agreement for a planned acquisition of Endocyte, a US-based biopharmaceutical company focused on developing targeted therapeutics for cancer treatment, for about $2.1 billion, to enlarge its portfolio of radiopharmaceuticals.
Novartis said the planned acquisition of Endocyte will help expand its expertise in cancer drugs and build on commitment to transformational therapeutic platforms.
Under the terms of the merger agreement, Novartis would acquire all outstanding shares of Endocyte common stock for $24 per share, for a total of $2.1 billion.
Chief executive Vas Narasimhan’s who is reshaping the Swiss drugs group from a pillmaker to a provider of sophisticated therapies, is counting on Endocyte’s treatment for prostate cancer topping $1 billion in sales after it hits the US market in 2021.
Endocyte uses drug conjugation technology to develop targeted therapies with companion imaging agents, including 177Lu-PSMA-617, for investigational radioligand therapy (RLT) for the treatment of metastatic castration-resistant prostate cancer (mCRPC).
177Lu-PSMA-617 targets the prostate-specific membrane antigen (PSMA), present in the majority of patients with mCRPC, and is said to have shown promising Phase II data. 177Lu-PSMA-617 is currently being investigated in the Phase III global VISION clinical trial in men with mCRPC, a disease with limited treatment options and significant unmet medical need.
If completed, the Endocyte acquisition would expand the Novartis RLT platform with both a potential near-term product launch and early-stage clinical development programmes. The deal would also enable Novartis to harness its research and development expertise to investigate the potential development of 177Lu-PSMA-617 for use in earlier lines of prostate cancer therapy.
“Today's announcement about the proposed acquisition of Endocyte builds on our growing capability in radiopharmaceuticals, which is expected to be an increasingly important treatment option for patients and a key growth driver for our business. We are also excited about the opportunity to break into the prostate cancer arena with a near-term product that has the potential to make a meaningful impact for patients in great need of more options," Liz Barrett, CEO, Novartis Oncology, said.
The Endocyte pipeline includes additional investigational RLTs, including 225Ac-PSMA-617 in preclinical studies for the treatment of mCRPC.
Radiopharmaceuticals such as 177Lu-PSMA-617 are innovative medicinal formulations containing radioisotopes that are used clinically for both diagnosis and therapy.
Through the acquisition of Advanced Accelerator Applications (AAA), Novartis acquired Lutathera (lutetium Lu 177 dotatate / INN: lutetium (177Lu) oxodotreotide) - the first ever approved Peptide Receptor Radionuclide Therapy - for the treatment of somatostatin-receptor positive gastroenteropancreatic neuroendocrine tumors (GEP-NETs), an orphan disease.
The transaction would be in the form of a merger of Endocyte and a newly formed Novartis subsidiary. Under the terms of the agreement and plan of merger, upon closing, holders of Endocyte common stock would receive $24 in cash per share. This offer values Endocyte's equity at $2.1 billion.
Closing of the transaction is subject to customary closing conditions, including the approval of Endocyte's stockholders and receipt of regulatory approvals, Novartis said, adding that Endocyte will continue to operate as a separate and independent company until closing of the deal.
The acquisition of Endocyte is planned to be funded through available cash, it added.