Novartis buys Endocyte for $2.1 billion

Novartis buys Endocyte for $2.1 billion

Endocyte would be Novartis' third multi-billion-dollar acquisition in the past 12 months, and its second in 2018. The deal values Endocyte at $24 per share, representing a 54-percent premium from the firm's $15.56 Wednesday closing price.

Endocyte is also developing a preclinical adaptor-controlled CAR-T therapy, which is created to overcome traditional CAR-Ts' reliance on the activity and specificity of T cells engineered to recognize specific, naturally expressed targets.

Lu-PSMA-617 targets the prostate-specific membrane antigen (PSMA), present in the majority of patients with metastatic castration-resistant prostate cancer (mCRPC), and has shown promising phase 2 data. It is now in a phase 3 registration trial - called VISION - that is due to report results in 2020. The company was founded by P. Ron Ellis and Philip S. Low on December 6, 1995 and is headquartered in West Lafayette, IN.

"The global reach and expertise of Novartis in developing and commercializing [radioligand] therapies will be critical in efforts for patients to benefit from these therapies as quickly as possible", said Endocyte CEO Mike Sherman.

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The Endocyte pipeline includes additional investigational RLTs, including Ac-PSMA-617 in preclinical studies for the treatment of mCRPC.

Through the acquisition of Advanced Accelerator Applications (AAA), Novartis acquired Lutathera (lutetium Lu 177 dotatate / INN: lutetium (177Lu) oxodotreotide) - the first ever approved Peptide Receptor Radionuclide Therapy - for the treatment of somatostatin-receptor positive gastroenteropancreatic neuroendocrine tumors (GEP-NETs), an orphan disease.

Shares of Endocyte traded up about 50% at $23.37 just after Thursday's opening bell.

Narasimhan said that transaction prompted Novartis to expand relationships with USA and European nuclear medicine centers. Novartis plans to fund the acquisition with available cash. It is expected to be completed in the first half of 2019, subject to approval by Endocyte stockholders, antitrust and regulatory approvals and other customary closing conditions.

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