Published: Sat, October 20, 2018
Health Care | By Cedric Leonard

Endocyte Set to Rumble on Sale to Novartis

Endocyte Set to Rumble on Sale to Novartis

Endocyte, a U.S. cancer-treatment provider, exploded 50% early Thursday after announcing it has reached a deal to be acquired by the Swiss drug maker Novartis.

The $24-per-share offer represents a premium of 54 percent to Endocyte's Wednesday closing price.

With the purchase, the Swiss company is adding to its arsenal of radiopharmaceuticals, a new group of drugs created to more closely target cancer cells.

"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.

The transaction was unanimously approved by Endocyte's board and is expected to close in the first half of 2019. The Phase III study, VISION, enrolled its first patient in June.

Under the agreement, Novartis will acquire all outstanding shares of Endocyte common stock for $US24 apiece -totaling $US2.1 billion - in cash.

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The deal, subject to regulatory approval, would expand Novartis' radiogland therapy pipeline with a potential near-term product launch and early stage clinical development programs.

"We are also excited about the opportunity to break into the prostate cancer arena with a near-term product that has the potential to make a meaningful impact for patients in great need of more options", Barrett added. Radiopharmaceuticals such as 177Lu-PSMA-617 are innovative medicinal formulations containing radioisotopes that are used clinically for both diagnosis and therapy.

Swiss drugmaker Novartis raised its full-year sales outlook, citing growing revenue from its Cosentyx psoriasis and arthritis drug as well as the performance of its heart failure medicine Entresto, whose third-quarter sales more than doubled.

Endocyte shares were trading up 50 percent to $23.39 in Thursday's pre-market session.

The acquisition of Endocyte is planned to be funded through available cash.

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