Swiss drugmaker Novartis buys Medicines Company in $6.8bn deal

Shareholders of New Jersey-based Medicines Company will receive $85 a share

Novartis has relied on acquisitions to sharpen the pharma giant’s focus on cutting-edge drugs. Reuters

Novartis agreed to buy the Medicines Company for an equity value of about $6.8 billion (Dh24.97bn), snapping up a promising cholesterol drug and adding to a string of acquisitions for chief executive Vas Narasimhan.

Medicines Company shareholders will get $85 a share, Switzerland-based Novartis said on Sunday. That is a 45 per cent premium to the closing price on November 18, before it was reported the two companies were in talks. The transaction value reaches $9.7bn on a fully diluted basis that includes outstanding stock options and convertible debt, Novartis said.

The deal brings an experimental cholesterol treatment, inclisiran, into a stable of Novartis products that includes heart-failure medicine Entresto. Novartis’s chief executive has relied on acquisitions to sharpen the pharma giant’s focus on cutting-edge drugs for cancer, rare diseases and other illnesses.

Shares of New Jersey-based Medicines had already tripled in the year with anticipation building over the blockbuster potential of inclisiran. Analysts estimate its sales could climb to more than $1bn by 2024. Medicines Company plans to submit an application for the drug in the US before the end of the year.

Recent data on the cholesterol treatment, a partnership with Alnylam Pharmaceuticals, suggest that inclisiran may offer a differentiated option from other drugs from Amgen as well as partners Regeneron Pharmaceuticals and Sanofi. The treatment relies on technology known as RNA interference, which essentially silences genes responsible for a disease.

Medicines Company’s drug cleared a key hurdle this summer as a late-stage study showed it cut bad cholesterol levels in half over 18 months. High levels of the substance are a leading cause of heart attacks.

Two years ago, the company said it would lay off most of its workers as it restructured to focus on developing inclisiran.

Novartis is rolling out products like Zolgensma, a gene therapy aimed at a devastating muscle disease that the company gained by acquiring drugmaker AveXis for $8.7bn in 2018. Last year, it also bought Endocyte for $2.1bn. Under Narasimhan, the company has also spun off the Alcon eye-care division and ditched a stake in a consumer-health venture.