Watch Out! Novartis AG Hungry for Small Takeover Targets With Early-Stage Drugs
January 25, 2017
By Mark Terry, BioSpace.com Breaking News Staff
While there’s a tendency to focus on big deals, such as Pfizer ’s acquisition of Medivation for $14 billion, Novartis has been quietly making small—very small—deals. In fact, Novartis has indicated that its business plan involves small acquisitions in the $2 to $5 billion range, but in December made four deals well under that size.
The company’s chief executive office, Joe Jiminez, recently said at the Novartis annual results news conference, “We look at everything, the bigger the target the higher the premium seems to be right now. We have gone upstream, and, if you heard, in the fourth quarter we announced four transactions that were quite early-stage, but they supplement the pipelines of our innovative medicines divisions.”
On November 21, 2016, Novartis announced it had acquired Selexys Pharmaceuticals Coporation, which focuses on hematologic and inflammatory disorders. Terms of the deal could hit $665 million in upfront, acquisition and milestone payments. The company has SelG1, an anti-P-selectin antibody, in late-stage trials to treat vaso-occlusive pain crises in sickle cell disease patients.
On December 16, 2016, Novartis acquired Ziarco Group Limited, a privately held company focused on dermatology. As part of the deal, Novartis picked up a once-daily oral H4 receptor antagonist, ZPL389, being developed for atopic dermatitis, better known as eczema. Financial details weren’t released.
On December 19, 2016, Novartis inked an exclusive option, collaboration and license agreement with Conatus Pharmaceuticals. Conatus focuses on liver disease. The two companies will jointly develop emricasan, an investigational, first-in-class, oral, pan-caspase inhibitor for non-alcoholic steatohepatitis (NASH) with advanced fibrosis and cirrhosis. Novartis made an upfront payment of $50 million. Once other criteria are met, there will be an additional exercise fee.
And on December 20, 2016, Novartis acquired Encore Vision, a private company in Forth Worth, Texas. Encore focuses on treatments for presbyopia, better known as farsightedness. No financial details were released. Encore’s lead product is EV06, a first-in-class topical treatment for presbyopia. In a Phase I/II, placebo-controlled proof of concept study, 50 patients were given daily doses for 90 days of EV06, and 25 received a placebo. EV06 showed a statistically significant improvement in distance vision over placebo.
At the meeting, Jiminez didn’t provide information about the company’s $13 billion stake in Roche . But, at the World Economic Forum held in Davos earlier this month, he said he was in no hurry to sell the shares in Roche. Reuters wrote, “The shareholding that amounts to a third of Roche’s voting rights continues to pad Novartis’s profits, adding $464 million to its bottom line in 2016.”
Although Novartis only got into immuno-oncology in 2015, it currently has 18 immuno-oncology drugs in its pipeline ranging from immune stimulating drugs, T-cell engineered therapeutics, T-cell modulators and molecules that affect the tumor microenvironment. Jay Bradner, president of the Novartis Institute for Biomedical Research (NIBR), speaking at the company’s fourth-quarter press conference, said, “Data emerging over the next 12-18 months from Novartis and competitor trials will inform the most impactful paths forward.”
Top of the list, CAR-T therapeutic CTL019, expected to be filed for pediatric acute lymphoblastic leukemia (ALL) soon. It also expects a follow-up marketing application in diffuse large B-cell lymphoma (DLBCL) by the end of 2017.
“Unlike checkpoint inhibitors,” Bradner noted, “these are definitive medicines. With an 82 percent overall response rate and many patients free of disease five years later, there’s a lot to be learned from this ‘first blush’ of CAR-T cell therapy.”