Novartis to expand radiopharmaceuticals portfolio with $2.1bn Endocyte acquisition

Swiss pharmaceutical company Novartis has announced a strategic acquisition of the US-based biopharma firm Endocyte for approximately $2.1 billion. This move aims to bolster Novartis’s capabilities in radiopharmaceuticals, particularly for cancer treatment. The acquisition will see Novartis purchase all outstanding shares of Endocyte at $24 per share.

Expanding Expertise in Radiopharmaceuticals

Endocyte specializes in developing targeted therapies combined with companion imaging agents through advanced drug conjugation technology. A key component of their portfolio is Lu-PSMA-617, an investigational radioligand therapy (RLT) designed to treat metastatic castration-resistant prostate cancer (mCRPC). This therapy targets the prostate-specific membrane antigen (PSMA), which is prevalent in many mCRPC patients and has shown encouraging results in Phase 2 trials.

Currently, Lu-PSMA-617 is under evaluation in a global Phase 3 trial named VISION, aimed at assessing its effectiveness in treating mCRPC.

Mike Sherman, President and CEO of Endocyte, expressed enthusiasm about the acquisition, stating, “Since acquiring exclusive worldwide rights to develop and commercialize PSMA-617 agents in 2017, the entire Endocyte team, along with our partners, have worked tirelessly to build a leading radioligand (RLT) portfolio and create value for patients and shareholders alike. We are thrilled that Novartis recognizes the potential for Lu-PSMA-617 to change the treatment landscape for men with metastatic castration-resistant prostate cancer (mCRPC), as well as the broader role that RLTs may potentially play in the treatment of cancer.”

Enhancing Novartis’s Radiopharmaceutical Platform

The acquisition will significantly enhance Novartis’s radioligand therapy platform. With the integration of Endocyte’s product, Novartis will not only advance the development of Lu-PSMA-617 but also explore its potential as an early-line treatment for prostate cancer.

Liz Barrett, CEO of Novartis Oncology, highlighted the strategic importance of this acquisition: “Novartis has a strong legacy of addressing unmet needs with transformative therapies and is building a leadership capability in new, technology-driven platforms that address some of the world’s most complex health challenges, including cancer. Today’s announcement about the proposed acquisition of Endocyte builds on our growing capability in radiopharmaceuticals, which is expected to be an increasingly important treatment option for patients and a key growth driver for our business. 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.”

Transaction Details and Future Outlook

The acquisition is expected to be completed in the first half of 2019, pending approval from Endocyte’s shareholders, antitrust and regulatory clearances, and other customary closing conditions.

In a related move, Novartis recently announced a deal involving its subsidiary Sandoz US, which will divest its dermatology and oral solids businesses to Indian pharmaceutical company Aurobindo Pharma for up to $1 billion. This divestiture aligns with Novartis’s strategic focus on core growth areas, including radiopharmaceuticals.