Health Care
Novartis agrees to buy Medicines Co. in $6.8 billion deal
(Bloomberg) –Novartis AG agreed to buy Medicines Co. for an equity value of about $6.8 billion, snapping up a promising cholesterol drug and adding to a string of acquisitions for Chief Executive Officer Vas Narasimhan.
Medicines Co. shareholders will get $85 a share, Basel, Switzerland-based Novartis said in a statement Sunday. That’s a 45% premium to the closing price on Nov. 18, before Bloomberg reported the two companies were in talks. The transaction value reaches $9.7 billion on a fully diluted basis that includes outstanding stock options and convertible debt, Novartis said.
The deal brings an experimental cholesterol treatment, inclisiran, into a stable of Novartis products that includes heart-failure medicine Entresto. Novartis’s CEO has relied on acquisitions to sharpen the pharma giant’s focus on cutting-edge drugs for cancer, rare diseases and other illnesses.
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Shares of Parsippany, New Jersey-based Medicines had already tripled in 2019 with anticipation building over the blockbuster potential of inclisiran. Analysts estimate its sales could climb to more than $1 billion by 2024. Medicines Co. plans to submit an application for the drug in the U.S. before year-end.
Recent data on the cholesterol treatment, a partnership with Alnylam Pharmaceuticals Inc., suggest that inclisiran may offer a differentiated option from other drugs from Amgen Inc. as well as partners Regeneron Pharmaceuticals Inc. and Sanofi. The treatment relies on technology known as RNA interference, which essentially silences genes responsible for a disease.
Medicines Co.’s drug cleared a key hurdle this summer as a late-stage study showed it cut bad cholesterol levels in half over 18 months. High levels of the substance are a leading cause of heart attacks.
Two years ago, the company said it would lay off most of its workers as it restructured to focus on developing inclisiran.
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Novartis is rolling out products like Zolgensma, a gene therapy aimed at a devastating muscle disease that the company gained by acquiring drugmaker AveXis Inc. for $8.7 billion in 2018. Last year, it also bought Endocyte Inc. for $2.1 billion. Under Narasimhan, the company has also spun off the Alcon Inc. eye-care division and ditched a stake in a consumer-health venture.
–With assistance from Cristin Flanagan.
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