Novartis to buy biotech The Medicines Co for $9.7bn

Grant Boone
November 27, 2019

Under the transaction's agreements, Novartis acquired The Medicines Company for USD 85.00 per share, representing a 41% premium over the Company's 30-day volume weighted average price of USD 60.33 per share and approximately 24% premium over its closing share price of USD 68.55 on November 22.

"We are excited about entering into an agreement to acquire The Medicines Company as inclisiran is a potentially transformational medicine that reimagines the treatment of atherosclerotic heart disease and familial hypercholesterolemia", read an official press release from Novartis.

Inclisiran was originally developed by USA company Alnylam Pharmaceuticals, from whom The Medicines Company licensed the drug.

Inclisiran is an investigational twice-yearly drug to reduce low-density lipoprotein cholesterol (LDL-C). The treatment relies on technology known as RNA interference, a biological process discovered in plants a few decades ago that halts genes from making protein.

The ORION-10 trial met all primary and secondary efficacy endpoints. Other companies working on similar treatments known as RNAi drugs include Alnylam (ALNY), which co-developed inclisiran, and Arrowhead Pharmaceuticals (ARWR). A small number of patients in both groups showed at least one serious treatment emergent adverse event, with incidences of deaths, 1.4% and 1.5%, and malignancies, 3.3% versus 3.3%, for placebo and inclisiran, respectively.

TMC says that inclisiran represents a near-term product launch opportunity and is expected to contribute to Group sales from 2021, as the company is expecting to file regulatory submissions in the U.S. in the fourth quarter of 2019 and in Europe in the first quarter of 2020.

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Since Narasimhan took over in February 2018, Novartis has announced nearly $16 billion in acquisitions. Under Narasimhan, the company has also spun off the Alcon Inc. eye-care division and ditched a stake in a consumer-health venture.

Another aspect of the drug that may draw skepticism from investors is that it's a PCSK9 inhibitor.

The deal also would put Novartis in a position to compete against rival healthcare giant Amgen, which has its own cholesterol drug Sanofi being produced by Regeneron Pharmaceuticals. Neither drug has done as well on the market as originally expected, and payers have been reluctant to reimburse the expensive drugs. This is handy for Novartis, which hopes to sell the drug using a sales force now responsible for Entresto, a heart failure drug that by then will be approaching the end of its patent life.

Inclisiran works in a different way to existing PCSK9-blocking drugs on the market such as Praluent. But the drugs, which are given by injection either every two weeks or monthly and had a hefty $14,000 price tag upon approval, faced resistance from clinicans, reports STAT.

Inclisiran may have a slight advantage in that it can be dosed twice a year during the maintenance phase, while Repatha and Praluent have to be dosed once or twice a month.

A major upcoming test of the breadth of inclisiran's reach is its 15,000-patient cardiovascular outcomes study, Orion-4, expected to read out in 2024.

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