Novartis says it will pay $2.1 billion to buy Endocyte, a U.S. company that focusses on the development of prostate cancer treatments.
Under the terms of the agreement, Novartis will buy Endocyte for $24 a share, or a total equity value of about $2.1 billion, in cash. The companies said the offer represents a premium of 54% to $15.56 closing price of Endocyte stock on Wednesday.
The transaction was unanimously approved by Endocyte’s board and is expected to close in the first half of 2019. However, it is still subject to customary closing conditions, including approval by shareholders of Endocyte.
Liz Barrett, chief executive officer of Novartis Oncology, commented, “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.”
The purchase is expected to give Novartis access to Endocyte’s radioactive drugs that are used to treat tumors and hold significant sales potential. Earlier this year, Novartis boosted the lower end of its 2018 revenue outlook saying that revenue will increase by a mid-single-digit percentage from its previous forecast of a percentage in the low to mid-single digits.
On their part, Endocyte through CEO Mike Sherman had this to say, “We are thrilled that Novartis recognizes the potential for Lu-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. The global reach and expertise of Novartis in developing and commercializing RLT therapies will be critical in efforts for patients to benefit from these therapies as quickly as possible.”
Shares of Novartis were changing hands at $85.88 after climbing 1.91% at 12:05 p.m. in New York on Thursday. Endocyte stock, which has rallied more than 445% since the beginning of the year, was up $7.89, or 50.71% to $23.45.
Novartis AG Company Profile
Novartis AG is a holding company, which engages in the development, manufacture, and marketing of healthcare products. It operates through the following segments: Innovative Medicines, Alcon, Sandoz, and Corporate. The company was founded on February 29, 1996 and is headquartered in Basel, Switzerland. – CNN Money
Endocyte, Inc Company Profile
Endocyte, Inc. is a biopharmaceutical company, which engages in the development of targeted therapies for the treatment of cancer and inflammatory diseases. It uses a proprietary technology to create novel small molecule drug conjugates and companion imaging diagnostics for personalized targeted therapies.
Its small molecule drug conjugates are actively target receptors that are over-expressed on diseased cells. The company was founded by P. Ron Ellis and Philip S. Low on December 6, 1995 and is headquartered in West Lafayette, IN. – CNN Money
