Novartis to expand renal portfolio with Chinook Therapeutics acquisition

Novartis has announced its agreement to acquire Chinook Therapeutics, a clinical stage biopharmaceutical company based in Seattle, Washington in a deal worth up to around $3.5 billion.

The acquisition will bring two late-stage medicines for rare, severe chronic kidney diseases into Novartis’ portfolio. It aligns with Novartis’ strategy to focus on innovative medicines and will significantly expand its offerings in the renal field.

The agreed acquisition, subject to customary closing conditions, will see Novartis acquire the Nasdaq-listed Chinook Therapeutics for $40 per share in cash, which amounts to $3.2 billion. There is also the potential for an additional $4 per share in cash through contingent value rights, bringing the total equity value of the transaction to approximately $3.5 billion.

Included in the deal is atrasentan, an oral endothelin A receptor antagonist, which is presently in phase 3 clinical stage for Immunoglobulin A Nephropathy (IgAN) with results expected to be revealed in Q4 2023. It has demonstrated significant reductions in proteinuria and also shows potential for treating other rare kidney diseases.

Zigakibart, an anti-APRIL monoclonal antibody, is another asset that is part of the deal, which is set to enter phase 3 clinical development for IgAN in Q3 2023.

Chinook Therapeutics’ expertise in understanding kidney disease and its early pipeline of treatments for severe renal conditions further enhance the value of the acquisition for Novartis.

Novartis to acquire Chinook Therapeutics to expand its renal portfolio with high-value medicines. Photo courtesy of Novartis AG.

The acquisition of Chinook Therapeutics by Novartis represents a premium of 83 percent to the former’s 60-day volume-weighted average stock price and 67 percent to its closing price on June 9, 2023.

Shareholders of Chinook Therapeutics will also receive contingent value rights (CVRs) that provide the potential for an additional $4 per share upon the achievement of certain future regulatory milestones related to atrasentan.

Eric Dobmeier — Chinook Therapeutics president and CEO, commenting on Novartis acquisition of Chinook Therapeutics, said: “We are pleased that Novartis recognizes the significant value that the Chinook team has built with our pipeline of clinical and preclinical programs for patients with rare, severe chronic kidney diseases.

“We believe this transaction is great news for kidney disease patients and the programs we have built at Chinook. Through this merger, Novartis can apply its substantial resources to pursue broader development efforts and commercialization of atrasentan, zigakibart (BION-1301) and other programs in our pipeline to build its global renal therapeutic area.”

Novartis’ acquisition of Chinook Therapeutics marks a significant step in expanding its renal portfolio and addressing the urgent need for targeted treatments for rare kidney diseases, such as IgAN. The transaction underscores Novartis’ commitment to innovation and its dedication to improving the lives of patients suffering from severe chronic kidney conditions.

The transaction has been unanimously approved by the boards of directors of both companies and is anticipated to close in the second half of 2023, pending customary closing conditions and regulatory approvals.

Commenting on Novartis acquisition of Chinook Therapeutics, Vas Narasimhan — Novartis CEO, said: “IgA Nephropathy is a devastating disease mostly affecting young adults and potentially leading to dialysis or kidney transplantation. We are excited by this unique opportunity to address one of society’s most challenging healthcare issues, with the potential to bring additional much-needed treatment options to patients.

“We look forward to closing the deal, to a smooth transition for Chinook employees and to welcoming them to Novartis.”