- Novartis AG will buy radiopharmaceutical specialist Advanced Accelerator Applications for $3.9 billion in a deal designed to bolster the Swiss pharma's oncology division with a recently approved cancer therapeutic and a pipeline of so-called molecular nuclear medicines.
- Per deal terms, Novartis will pay $41 per ordinary share of Advanced Accelerator and $82 per American Depositary Shares — representing a 47% premium to the 30 volume-weighted trading days prior to a Sept. 27 Bloomberg report that flagged Novartis as a potential suitor for the French company.
- In September, Advanced Accelerator won EU approval of a radioligand therapy called Lutathera for use as a treatment of neuroendocrine tumors. The Food and Drug Administration is currently reviewing Lutathera and is expected to decide on approval by Jan. 26, 2018.
Oncology is Novartis' largest pharmaceutical business division, bringing in just over $3 billion in sales during the third quarter.
But generic competition to its once top-selling cancer drug Gleevec (imatinib) has weighed on the unit. Investor attention has, in turn, focused on new potential growth drivers, such as the recently approved CDK 4/6 inhibitor Kisqali (ribociclib) and the CAR-T therapy Kymirah (tisagenlecleucel).
Novartis' deal for Advanced Accelerator fits neatly with the company's recent approach to business development, and helps to further build out its oncology portfolio.
"We have said publicly that our M&A strategy is to do bolt-on acquisitions, smaller acquisitions that would supplement the pipelines of each of our important divisions, and that hasn't changed," outgoing company Joseph Jimenez had reiterated on a Oct. 24. call with analysts.
Lutathera (lutetium oxodotreotide) complements Novartis' existing interest in neuroendocrine tumors (NETs), led by its marketed product Afinitor (everolimus).
The EU approved Lutathera for treatment of metastatic, somatostatin receptor positive gastroenteropancreatic neuroendocrine tumors based on a Phase 3 study that showed a 79% reduction in risk of disease progression or death compared to control therapy.
In announcing the deal, Novartis touted Advanced Accelerator's capabilities in developing and manufacturing radiopharmaceuticals, which contain radioisotopes to destroy unhealthy cells or diagnose cancers.
The French company has already won U.S. approval of Netspot, a radioactive diagnostic agent used to detect NETs.