Narasimhan, who raised Novartis's 2018 revenue forecast on Thursday as he released third-quarter results, is counting on Endocyte's treatment for prostate cancer topping $1 billion in sales after it hits the USA market in 2021. The deal values Endocyte at $24 per share, representing a 54-percent premium from the firm's $15.56 Wednesday closing price.
Endocyte, Inc.is a biopharmaceutical company, which engages in the development of targeted therapies for the treatment of cancer and inflammatory diseases.
Completion of the transaction is expected in the first half of 2019.
Novartis said in September that it will cut 2,550 jobs in Switzerland and Britain over four years, as the it strives to boost profits and focus on new medicines.
Data from a Phase II study of the drug presented in a poster in June at the American Society of Clinical Oncology's annual meeting indicated that of the 50 patients receiving Lu-PSMA-617, 62 percent had a greater than 50 percent reduction in their prostate-specific antigen levels, while 44 percent of patients had a PSA reduction of 80 percent or more. It is now in a phase 3 registration trial - called VISION - that is due to report results in 2020.
It's worth pointing out that buying Endocyte also gives Novartis an additional platform in CAR-T cancer immunotherapy to complement its current assets, including already-marketed therapy Kymriah (tisagenlecleucel) for CD19-positive blood cancers. Endocyte shares were trading at $US23.48 on Thursday morning. Radiopharmaceuticals such as 177Lu-PSMA-617 are innovative medicinal formulations containing radioisotopes that are used clinically for both diagnosis and therapy.
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 plans to fund the acquisition with available cash.