Vasant Narasimhan, CEO of Novartis, took charge in February | Photo: Reuters
Novartis AG agreed to buy cancer drugmaker Endocyte for $2.1 billion, or $24 a share, expanding further into the increasingly competitive and lucrative field of oncology.
Endocyte, based in the U.S., makes radioactive drugs coupled with molecules that target specific cells to deliver treatments to tumors. The offer is a 54 per cent premium to the biotech’s closing price Wednesday of $15.56.
The planned purchase adds to Chief Executive Officer Vasant Narasimhan’s plans for expansion. Novartis earlier this year announced the purchase of rare-disease drugmaker AveXis Inc. for $8.7 billion.
Endocyte’s therapy, known as Lu-PSMA-617, has shown promising mid-stage data in prostate cancer and is currently in more advanced testing in men with a form of the disease with limited treatment options and significant unmet need, Novartis said. Narasimhan said the drug has blockbuster potential.
Narasimhan isn’t finished in his bid to narrow the focus on cutting-edge drugs after the deal to sell parts of its US generic drugs unit, decision to spin off its Alcon eye-care unit and the sale of its stake in a consumer venture with Glaxo.
Novartis last year agreed to buy Advanced Accelerator Applications for about $3.9 billion in cash, snapping up a radiopharmaceutical company whose drugs are used to diagnose and treat cancer and other diseases.
The company 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.