Novartis to Buy AveXis for $8.7 Billion

   By Alberto Delclaux

Novartis AG (NOVN.EB) said Monday that it entered an agreement to buy U.S.-based clinical-stage gene therapy company AveXis Inc. (AVXS) for $8.7 billion dollars.

The pharmaceutical company will pay $218 per AveXis share, an 88% premium to its closing price on April 6. It intends to fund the acquisition with available cash and short-term borrowing.

Novartis said it expects the deal to slightly hit core operating income in 2018 and 2019, due to R&D investments. It said the acquisition should strongly benefit core operating income and core earnings a share as of 2020, however, driven by an increase in sales.

AveXis is undertaking several clinical studies for the treatment of spinal muscular atrophy, or SMA, an inherited neurodegenerative disease caused by a defect in a single gene, Novartis said. Its gene therapy candidate AVXS-101 has the potential to be the first one-time gene replacement therapy for SMA, according to Novartis.

The transaction was approved unanimously by the boards of the two companies, Novartis said, and closing of the deal is expected in mid-2018.

Write to Alberto Delclaux at alberto.delclaux@dowjones.com

(END) Dow Jones Newswires

April 09, 2018 01:27 ET (05:27 GMT)

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