NVS Novartis AG

By Donato Paolo Mancini 

Novartis AG on Thursday said it would buy cancer-drug maker Endocyte Inc. for $2.1 billion, the Swiss pharmaceutical giant's latest move to refocus on higher-value medicines.

Novartis said it would pay $24 a share for the U.S.-based company, which has a focus on prostate cancer -- an area with significant unmet medical need. It said the deal would bolster its capability in radiopharmaceuticals, which it expects to be a key growth driver for its business.

The deal is the latest move by new Chief Executive Vasant Narasimhan, who took the helm earlier this year, to refocus Novartis on medicines. Over the past year the company has decided to shed its Alcon eye-care unit, sold parts of its generics business and announced layoffs. It also bought U.S.-based gene-therapy company AveXis Inc. for $8.7 billion and sold its stake in a consumer health-care business to joint-venture partner GlaxoSmithKline PLC for $13 billion.

The acquisition of Endocyte is the company's second radiopharmaceuticals acquisition in roughly a year, after it bought Advance Accelerator Applications for $3.9 billion last October.

Thursday's deal came as Novartis reported a rise in third-quarter sales and raised its outlook for the rest of the year.

It now expects net sales growth in the mid-single digit, compared with its previous guidance of low to mid-single digit.

For the third quarter, net group sales came in at $12.78 billion, compared with $12.41 billion in the previous year. Sales in the innovative medicines division grew by 9% at constant currencies.

(END) Dow Jones Newswires

October 18, 2018 03:20 ET (07:20 GMT)

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