BY Richard Summerfield
Swiss drug manufacturer Novartis AG has agreed to acquire boutique gene-therapy company AveXis Inc for $8.7bn.
The deal will see Novartis pay $218 in cash for each AveXis share held, a 72 percent premium to AveXis’s 30-day volume-weighted average stock price. The deal is expected to close in mid-2018.
“The commitment, drive and expertise of the entire AveXis team has created significant stockholder value, and we are pleased that Novartis recognizes that value in the potential of AVXS-101, our first in class manufacturing capabilities and our gene therapy pipeline, all of which serve to transform the lives of people devastated by rare and life threatening neurological diseases such as SMA, Rett syndrome and genetic ALS,” said Sean Nolan, president and chief executive of AveXis. “With worldwide reach and extensive resources, Novartis should expedite our shared vision of bringing gene therapy to these patient communities across the globe as quickly and safely as possible.”
Since Mr Narasimhan became CEO of Novartis International, the company has refocused its efforts on expanding into new areas. Focused medicines and gene therapy have become key areas for the company. Earlier this year Novartis made a $170m deal with Spark for rights to use its blindness treatment, Luxturna, outside the US.
According to a statement announcing the deal, AveXis has several ongoing clinical studies for the treatment of SMA, an inherited neurodegenerative disease caused by a defect in a single gene.
“The proposed acquisition of AveXis offers an extraordinary opportunity to transform the care of SMA. We believe AVXS-101 could create a lifetime of possibilities for the children and families impacted by this devastating condition,” said Mr Narasimhan. “The acquisition would also accelerate our strategy to pursue high-efficacy, first-in-class therapies and broaden our leadership in neuroscience. We would gain with the team at AveXis another gene therapy platform, in addition to our CAR-T platform for cancer, to advance a growing pipeline of gene therapies across therapeutic areas. We look forward on the closing of the deal to a smooth transition for AveXis employees and welcoming them to Novartis.”
Paul Hudson, chief executive of Novartis Pharmaceuticals, said: “Bringing AveXis on board would support both our ambition to be a leader in neurodegenerative diseases and our Neuroscience franchise priorities to strengthen our position in devastating pediatric neurological diseases such as SMA. We relish the opportunity to leverage our expertise, our 70-plus year heritage in neuroscience and our global footprint to help AVXS-101 benefit high-need SMA patients around the world.”
Novartis will likely fund the deal through the $13bn it recouped for selling its stake in a consumer healthcare joint venture with its partner GlaxoSmithKline. The deal, which was announced in late March, saw GSK take control of a number of products, including Sensodyne toothpaste, Panadol headache tablets, muscle gel Voltaren and Nicotinell patches.