Business World

Saturday 23 June 2018

Novartis bets big on gene therapy with $8.7bn AveXis deal

Logo of drugmaker Novartis is seen at its branch in Schweizerhalle near Basel, Switzerland
Logo of drugmaker Novartis is seen at its branch in Schweizerhalle near Basel, Switzerland

John Miller

Swiss drugmaker Novartis is moving further into gene therapy by buying AveXis for $8.7bn (€7bn), adding a rare-disease treatment that could reap billions in sales.

The acquisition reflects a surge of interest in biotech dealmaking as large pharmaceutical companies seek promising new assets to boost their pipelines.

The $218-per-share cash deal announced yesterday represents a 72pc premium to AveXis's 30-day volume-weighted average stock price.

Novartis CEO Vas Narasimhan, who took over on February 1, is flush with cash, having just agreed to sell his company's stake in a consumer healthcare joint venture to GlaxoSmithKline for $13bn.

Narasimhan is now counting on AveXis's main drug - AVXS-101, a treatment for deadly spinal muscular atrophy - as well as the Illinois-based company's gene therapy expertise and manufacturing capabilities, to bolster Novartis's neuroscience business, a focus for the Swiss company.

This is Novartis's second notable gene therapy deal this year, after it agreed to pay $105m upfront and up to $65m in milestone payments for rights to Spark's blindness treatment Luxturna outside the United States. "We believe the medicine would have a multi-billion dollar peak sales potential," Narasimhan told reporters. (Reuters)

Irish Independent

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