Novartis Announces Purchase of Medicines Co. for $ 9.7 Billion
- Nov 26, 2019
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Novartis has agreed to buy Medicines Co. and its heart drug for $ 9.7 billion. Shareholders will receive $ 85 per share. The information is from Bloomberg. The company's experimental treatment is the latest step in the therapy of complex health conditions.
Named as Inclisiran, the drug uses a new approach to lowering bad cholesterol in patients with difficult-to-treat conditions. Because of the innovation, Novartis CEO Vas Narasimhan has been willing to pay the bill as the drug appears to be nearing the US market where it will compete with Amgen Inc., Regeneron Pharmaceuticals Inc. and Sanofi products. .
Today, pharmaceutical companies are looking for ways and technologies to differentiate them from competitors, leaving room for sales growth and allowing them to charge higher prices. With the new deal, Narasimhan is adding Medicines Co. to a list of acquired companies that includes AveXis, maker of $ 2.1 million gene therapy and Endocyte, developer of targeted cancer treatments.
What promises the innovation behind Inclisiran
Inclisiran, an experimental heart drug, is based on a technology discovered in recent decades that prevents the production of specific proteins by cells. Unlike existing treatments, which need to be given once or twice a month, Inclisiran is a therapy that should be injected only twice a year.
According to Peter Welford, an analyst at Jefferies in London, If approved by regulators, annual sales could peak at $ 4 billion.
Medicines Co. shareholders will receive $ 85 per share. That number represents a 45% premium over the closing price on November 18, before Bloomberg reported that the two companies were in talks.
Although the transaction does not offer Novartis a research platform or other significant assets other than Inclisiran, the company aims to reach a patient population of about 50 million people. As a result, the drug could become one of Novartis' biggest successes, increasing profit margins in the company's innovative drug division.