Novartis AG said it plans to buy AveXis for $218 per share in a cash deal totalling $8.7 billion, adding a therapy hopeful for spinal muscular atrophy (SMA) to the Swiss drugmaker’s pipeline that is expected to reap billions in annual sales, CNBC reported. The drugmaker announced the deal on Monday.
The acquisition is the latest example of a surge of interest in biotech deal-making this year as large pharmaceutical companies seek promising new assets to boost their pipelines.
The deal represents a 72 percent premium to AveXis’s 30-day volume-weighted average stock price. The transaction is seen closing in mid-2018, Reuters reported.
Novartis Chief Executive Vas Narasimhan is counting on AveXis’s main SMA drug, AVXS-101, as well as its gene therapy expertise and manufacturing capabilities to bolster Novartis’s neuroscience business, one of the Swiss company’s main focus areas.
According to Novartis, AveXis is developing a product to treat SMA, an inherited neurodegenerative disease caused by a defect in a single gene, which shows the potential to become a blockbuster.
“We believe the medicine would have a multi-billion dollar peak sales potential,” Narasimhan said, on a conference call with reporters, CNBC reported. “We have been regularly scanning and looking for bolt-in acquisition candidates.”
“This acquisition makes strategic sense,” Stefan Schneider, an analyst at Vontobel AG in Zurich, wrote in a note to clients, Bloomberg reported.
Novartis International AG is a Swiss multinational pharmaceutical company based in Basel, Switzerland.
AveXis, Inc., a clinical-stage gene therapy company, engages in developing and commercializing novel treatments for patients suffering from rare and life-threatening neurological genetic diseases. The company was founded in 2010 and is headquartered in Bannockburn, Illinois.