Published: Sat, October 20, 2018
Medical | By Johnnie Horton

Novartis to buy cancer drug firm Endocyte for $2.1bn

Novartis to buy cancer drug firm Endocyte for $2.1bn

Novartis AG agreed to buy United States drugmaker Endocyte Inc. for $2.1 billion, snapping up a potential blockbuster therapy for prostate cancer and helping to fill out a treatment area targeted by the Swiss pharmaceutical giant.

Novartis will pay $24 a share for Endocyte, 54% more than its closing price Wednesday of $15.56, the Basel-based company said Thursday.

Novartis said that, after completing the deal, it will harness its research and expertise to investigate the development of Endocyte's 177Lu-PSMA-617, a potential first-in-class investigational radioligand therapy (RLT) for the treatment of metastatic castration-resistant prostate cancer.

Endocyte's knowledge and abilities will help Novartis in its development of a drug that can be used earlier in the treatment of prostate cancer. In the transaction, Endocyte would be merged with a newly formed subsidiary of Novartis. 177Lu-PSMA-617 is now being investigated in a global Phase III clinical trial in men with mCRPC.

Novartis has signed a deal to acquire United States biopharma Endocyte, securing itself access to novel radiopharmaceutical programmes "with significant sales potential". Lu-PSMA-617 targets the prostate-specific membrane antigen (PSMA), present in the majority of patients with mCRPC, and has shown promising Phase II data.

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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.

That is a great result for Endocyte-its shares rose 50%. Earlier this year, Novartis boosted the lower end of its 2018 revenue outlook saying that revenue will increase by a mid-single-digit percentage from its previous forecast of a percentage in the low to mid-single digits.

Endocyte's board has unanimously approved the acquisition deal.

The acquisition of Endocyte is planned to be funded through available cash.

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