Novartis AG agreed to buy US drug maker Endocyte Inc for $2.1bn, snapping up a potential blockbuster therapy for prostate cancer as the Swiss pharmaceutical giant broadens its arsenal against tumours.
Novartis will pay $24 a share for Endocyte, 54% more than its last closing price, the Basel-based company said yesterday. Endocyte makes radioactive drugs coupled with targeting molecules to deliver treatments to tumours.
The approach is one of three key areas, along with cell and gene therapies, where Novartis is keen to expand, and chief executive officer Vas Narasimhan signalled that he still hasn’t finished raising the drug maker’s profile in those fields. The company remains interested in bolt-on acquisitions, he said.
“We believe we need to move into advanced-therapy platforms,” Narasimhan said in an interview on Bloomberg Television. The Endocyte transaction “will give us the global footprint, capability and portfolio to really own” the so-called radioligand sector, he said.
Endocyte’s experimental prostate cancer therapy, known as Lu-PSMA-617, has progressed to final-stage testing in men who have limited options for treatment and may reach the market in 2021, Novartis said. It uses a small molecule to aim a radioactive cancer drug at a target, called PSMA, that’s found in high numbers on the surface of diseased cells, according to Endocyte.
Endocyte’s experimental prostate cancer therapy, known as Lu-PSMA-617, has progressed to final-stage testing in men who have limited options for treatment and may reach the market in 2021, Novartis said. It uses a small molecule to aim a radioactive cancer drug at a target, called PSMA, that’s found in high numbers on the surface of diseased cells, according to Endocyte.
Under Narasimhan, Novartis is assembling technologies to attack cancer on multiple fronts. The company last year agreed to buy Advanced Accelerator Applications SA for about $3.9bn, getting a radio-pharmaceutical company whose drugs are used to diagnose and treat diseases such as cancer. Novartis earlier this year announced the purchase of rare-disease drug maker AveXis Inc for $8.7bn.
Endocyte will also add to Novartis’s efforts in CAR-T, the treatment technology that alters patients’ immune cells to aggressively attack cancers. The US company has a research program looking at ways to use CAR-T to target multiple tumours and is currently investigating the therapy in people with a form of bone cancer called osteosarcoma.
Separately, Novartis raised the lower end of its forecast for sales growth for the year, saying that annual sales will rise by a mid-single-digit percentage. Novartis had said in July that it expected sales in 2018 to rise by a percentage in the low to mid-single digits. The performance this year puts the drug maker “in a solid place entering 2019 and future years,” Narasimhan said in the interview.
The company remains committed to taking about $1bn of costs out of its manufacturing operations, he said. Novartis said last month it plans to cut more than 2,000 jobs in Switzerland within the next four years.
Novartis rose as much as 2.2% in Zurich.