Novartis to Buy AveXis for $8.7 Billion -- Update
April 09 2018 - 3:00AM
Dow Jones News
(Adds background, CEO comments.)
By Alberto Delclaux
Novartis AG (NOVN.EB) said Monday that it entered an agreement
to buy U.S.-based gene-therapy company AveXis Inc. (AVXS) for $8.7
billion dollars as part of its neuroscience strategy.
The deal follows the recent sale of Novartis's stake in its
consumer health-care joint venture to GlaxoSmithKline PLC (GSK.LN)
for $13 billion. Novartis Chief Executive Vas Narasimhan said the
AveXis transaction will be partly financed from proceeds of that
sale.
The Swiss pharmaceutical company will pay $218 a share of AveXis
in cash, an 88% premium to its closing price on April 6, and
intends to fund the acquisition with available cash and short-term
borrowing.
Looking ahead, 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 a gene-therapy company conducting 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. Some form of SMA affects an estimated one out
of every 6,000 to 10,000 children born, it said.
AveXis's gene therapy candidate AVXS-101 has the potential to be
the first one-time gene replacement therapy for SMA, according to
Novartis, and it currently has orphan drug designation from the
U.S. Food and Drug Administration for the treatment of SMA.
"We would gain with the team at AveXis another gene therapy
platform, in addition to our CAR-T platform for cancer, to advance
a growing pipeline of gene therapies across therapeutic areas,"
said Mr. Narasimhan.
The transaction was unanimously approved by the boards of the
two companies, Novartis said, and the deal is expected to close in
mid-2018.
Write to Alberto Delclaux at alberto.delclaux@dowjones.com
(END) Dow Jones Newswires
April 09, 2018 02:45 ET (06:45 GMT)
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