Chinook Therapeutics, Inc. (Nasdaq: KDNY), a biopharmaceutical
company focused on the discovery, development and commercialization
of precision medicines for kidney diseases, today announced that it
has entered into an agreement and plan of merger with Novartis AG
pursuant to which Novartis will acquire Chinook for $40 per share
in cash, or a total of $3.2 billion. This offer represents a
premium of 83 percent to Chinook’s 60-day volume-weighted average
stock price and 67 percent to Chinook’s closing price on June 9,
2023. In addition, Chinook shareholders will receive contingent
value rights (CVRs) providing for payment of up to $4 per share
upon the achievement of certain future regulatory milestones with
respect to Chinook’s lead product candidate, atrasentan. Total
consideration including the contingent value right, if the
milestones are achieved, would be approximately $3.5 billion. The
transaction has been unanimously approved by the Boards of
Directors of both companies.
“We are pleased that Novartis recognizes the significant value
that the Chinook team has built with our pipeline of clinical and
preclinical programs for patients with rare, severe chronic kidney
diseases,” said Eric Dobmeier, president and chief executive
officer of Chinook Therapeutics. “We believe this transaction is
great news for kidney disease patients and the programs we have
built at Chinook. Through this merger, Novartis can apply its
substantial resources to pursue broader development efforts and
commercialization of atrasentan, zigakibart (BION-1301) and other
programs in our pipeline to build its global renal therapeutic
area.”
Completion of the transaction is expected in the second half of
2023, pending approval by Chinook’s stockholders and satisfaction
of other customary closing conditions. Until that time, Chinook
will continue to operate as a separate and independent company.
Centerview Partners LLC and MTS Health Partners, L.P. are
serving as financial advisors, and Fenwick & West LLP is
serving as legal counsel to Chinook.
Transaction DetailsUnder the terms of the
merger agreement, Novartis will acquire all of the outstanding
shares of Chinook through a subsidiary for a price of $40 per share
in cash at closing. The CVRs to be issued to Chinook shareholders
will provide for payments of up to an additional $4 per share with
respect to specific regulatory approvals for atrasentan, $2 of
which is related to IgA nephropathy and $2 of which is related to
focal segmental glomerulosclerosis. The closing of the proposed
transaction is subject to certain conditions, including approval by
Chinook’s stockholders, the expiration of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act and other
customary conditions. A copy of the merger agreement will be filed
with the Securities and Exchange Commission (“SEC”) and will be
publicly available.
About Chinook Therapeutics, Inc.Chinook
Therapeutics, Inc. is a clinical-stage biopharmaceutical company
developing precision medicines for kidney diseases. Chinook’s
product candidates are being investigated in rare, severe chronic
kidney disorders with opportunities for well-defined clinical
pathways. Chinook’s lead program is atrasentan, a phase 3
endothelin receptor antagonist for the treatment of IgA nephropathy
and proteinuric glomerular diseases. Zigakibart (BION-1301), an
anti-APRIL monoclonal antibody, is being evaluated in a phase 1/2
trial for IgA nephropathy. CHK-336, an oral small molecule LDHA
inhibitor for the treatment of hyperoxalurias, is in phase 1
development. In addition, Chinook’s research and discovery efforts
are focused on building a pipeline of precision medicines for rare,
severe chronic kidney diseases with defined genetic and molecular
drivers. Chinook is leveraging insights from kidney single cell RNA
sequencing and large CKD patient cohorts that have been
comprehensively panomically phenotyped, with retained biosamples
and prospective clinical follow-up, to discover and develop
therapeutic candidates with mechanisms of action targeted against
key kidney disease pathways. To learn more, visit
www.chinooktx.com.
Forward-Looking Statements In addition to
historical information, this communication contains forward-looking
statements within the meaning of applicable securities law,
including statements regarding the expected timing, completion and
effects of the proposed merger. In addition, when used in this
communication, the words “will,” “expects,” “could,” “would,”
“may,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“targets,” “estimates,” “looks for,” “looks to,” “continues” and
similar expressions, as well as statements regarding our focus for
the future, are generally intended to identify forward-looking
statements. Each of the forward-looking statements we make in this
communication involves risks and uncertainties that could cause
actual results to differ materially from these forward-looking
statements. Factors that might cause or contribute to such
differences include, but are not limited to: expected revenues,
cost savings, synergies and other benefits from the proposed merger
might not be realized within the expected time frames or at all and
costs or difficulties relating to integration matters, including
but not limited to employee retention, might be greater than
expected; the requisite regulatory approvals and clearances for the
proposed transaction may be delayed or may not be obtained (or may
result in the imposition of conditions that could adversely affect
the combined company or the expected benefits of the proposed
merger); the requisite approval of Company stockholders may be
delayed or may not be obtained, the other closing conditions to the
proposed merger may be delayed or may not be obtained, or the
merger agreement may be terminated; business disruption may occur
following or in connection with the proposed merger; Novartis or
Chinook’s businesses may experience disruptions due to
transaction-related uncertainty or other factors making it more
difficult to maintain relationships with employees, other business
partners or governmental entities; the milestones for the proposed
CVRs may not be achieved; the possibility that the proposed merger
is more expensive to complete than anticipated, including as a
result of unexpected factors or events; and diversion of
management’s attention from ongoing business operations and
opportunities as a result of the proposed merger or otherwise.
Additional factors that may affect the future results of Novartis
and Chinook are set forth in their respective filings with the U.S.
Securities and Exchange Commission (the “SEC”), including in the
most recently filed annual report of Novartis on Form 20-F,
subsequently filed Current Reports on Form 6-K and other filings
with the SEC, which are available on the SEC’s website at
www.sec.gov, and Chinook’s most recently filed Annual Report on
Form 10-K, subsequent Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and other filings with the SEC, which are
available on the SEC’s website at www.sec.gov. The risks described
in this communication and in Novartis and Chinook’s filings with
the SEC should be carefully reviewed. Undue reliance should not be
placed on these forward-looking statements, which speak only as of
the date they are made. Novartis and Chinook undertake no
obligation to publicly release any revisions to the forward-looking
statements or reflect events or circumstances after the date of
this communication, except as required by law.
Additional Information and Where to Find It In
connection with the proposed merger between Novartis and Chinook,
Novartis and Chinook intend to file relevant materials with the
SEC, including a preliminary and definitive proxy statement to be
filed by Chinook. The definitive proxy statement and proxy card
will be delivered to the stockholders of Chinook in advance of the
special meeting relating to the proposed merger. CHINOOK’S
STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT IN
ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS
FILED BY EACH OF NOVARTIS AND CHINOOK WITH THE SEC IN CONNECTION
WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE THEREIN
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Investors
and security holders will be able to obtain a free copy of the
proxy statement and such other documents containing important
information about Novartis and Chinook, once such documents are
filed with the SEC, through the website maintained by the SEC at
www.sec.gov. Novartis and Chinook make available free of charge at
the Novartis website and Chinook’s website, respectively (in the
“Investors” section), copies of materials they file with, or
furnish to, the SEC. The contents of the websites referenced above
are not deemed to be incorporated by reference into the proxy
statement.
Participants in the Solicitation This document
does not constitute a solicitation of proxy, an offer to purchase
or a solicitation of an offer to sell any securities. Novartis,
Chinook and their respective directors, executive officers and
certain employees may be deemed to be participants in the
solicitation of proxies from the stockholders of Chinook in
connection with the proposed merger. Information regarding the
special interests of these directors and executive officers in the
proposed merger will be included in the definitive proxy statement
referred to above. Security holders may also obtain information
regarding the names, affiliations and interests of the Novartis
directors and executive officers in the Novartis Annual Report on
Form 20-F and Form 20-F/A for the fiscal year ended December 31,
2022, which were filed with the SEC on February 1, 2023, and May
15, 2023, respectively. Security holders may obtain information
regarding the names, affiliations and interests of Chinook’s
directors and executive officers in Chinook’s Annual Report on Form
10-K for the fiscal year ended December 31, 2022, which was filed
with the SEC on February 27, 2023, and its definitive proxy
statement for the 2023 annual meeting of stockholders, which was
filed with the SEC on April 28, 2023. To the extent the holdings of
Chinook’s securities by Chinook’s directors and executive officers
have changed since the amounts set forth in Chinook’s definitive
proxy statement for its 2023 annual meeting of stockholders, such
changes have been or will be reflected on Statements of Change in
Ownership on Form 4 filed with the SEC. Additional information
regarding the interests of such individuals in the proposed merger
will be included in the definitive proxy statement relating to the
proposed merger when it is filed with the SEC. These documents
(when available) may be obtained free of charge from the SEC’s
website at www.sec.gov, the Novartis website at
https://www.novartis.com and Chinook’s website at
https://www.chinooktx.com. The contents of the websites referenced
above are not deemed to be incorporated by reference into the proxy
statement.
Investor Contact:
Noopur Liffick, MPH
Senior Vice President, Investor Relations & Corporate Communications
investors@chinooktx.com
Media Contact:
Kelly North
Senior Manager, Investor Relations & Corporate Communications
media@chinooktx.com
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