Novartis Nears Deal to Buy Drug Maker The Medicines Co. --Update
November 23 2019 - 2:44PM
Dow Jones News
By Dana Cimilluca, Cara Lombardo and Jonathan D. Rockoff
Novartis AG is nearing a deal to buy cholesterol-drug maker The
Medicines Co. for nearly $7 billion, in an expensive bid to expand
its reach in the lucrative market for heart treatments.
The pharmaceutical giant has agreed to pay $85 a share in a deal
that could be announced this weekend, people familiar with the
matter said.
The acquisition would help Novartis, which has a market value of
more than $200 billion, bulk up in a corner of the health-care
market it is already targeting with drugs including its
heart-failure treatment Entresto.
Novartis, based in Basel, Switzerland, had high hopes for
Entresto, but early sales haven't met Wall Street expectations.
Prescriptions have picked up, however, and sales jumped to $430
million in the third quarter.
The cholesterol drug under development by Medicines, based in
Parsippany, N.J., is aimed at patients who aren't well-treated by
older statin pills.
Pairing the Novartis and Medicines therapies would give sales
representatives more products to peddle to heart doctors,
potentially boosting sales of each.
The Medicines drug is based on relatively new technology that
uses the body's molecular messengers, known as RNA, to turn off
genes playing a role in a disease. The technology is known as RNA
interference.
Novartis Chief Executive Vas Narasimhan has been trying to steer
the drugmaker into newer technologies through deals, such as its
$8.7 billion acquisition of AveXis.
Novartis has faced scrutiny for pricing AveXis's Zolgensma gene
therapy at $2.1 million, and for waiting to notify the U.S. Food
and Drug Administration about the manipulation of some of the
drug's test data until after the therapy's approval.
So far, sales of these so-called PCSK9 drugs from Amgen Inc.,
Sanofi SA and Regeneron Inc. haven't met expectations, partly
because health insurers have recoiled at their high prices.
Supporters say The Medicines entrant, known as inclisiran, will
be different because it is based on a different kind of technology
that interferes with the production of a key protein. And patients
wouldn't have to take the drug as often as the others.
Medicines executives have said they would price their
cholesterol drug lower, though a deal would leave the decision in
Novartis's hands.
Medicines has said it would file for the therapy's approval by
year's end in the U.S. and in the first quarter of 2020 in Europe.
Medicines licensed inclisiran from Alnylam Pharmaceuticals Inc.
World-wide sales of cholesterol drugs are growing nearly 11% a
year and are projected to reach $17.7 billion in 2024, according to
EvaluatePharma. High cholesterol is a leading cause of heart
disease.
Medicines shares have risen as the company has reported positive
data from testing of its drug. The stock has nearly quadrupled this
year -- helped by a report from Bloomberg this week that the
company was exploring a sale.
The shares closed at $68.55 Friday, meaning that the deal would
value Medicines at 20% or more above that.
Write to Dana Cimilluca at dana.cimilluca@wsj.com, Cara Lombardo
at cara.lombardo@wsj.com and Jonathan D. Rockoff at
Jonathan.Rockoff@wsj.com
(END) Dow Jones Newswires
November 23, 2019 14:29 ET (19:29 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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