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AAA board presses go on $3.9bn Novartis takeover

French radiopharmaceuticals firm backs the cash offer

Novartis

Novartis has started its cash tender offer for French firm Advanced Accelerator Applications, which specialises in radiopharmaceuticals to treat cancer.

Novartis offer to buy the company was made in October and – after negotiations with company’s works council – AAA’s board has now given its blessing to the $41 per share takeover, which values the French company at $3.9bn. The tender offer will expire at midnight on January 19 unless extended, said Novartis.

With the acquisition, Novartis is aiming to add AAA’s Lutathera (Lutetium Lu177 dotatate) for treating gastroenteropancreatic neuroendocrine tumours (NET) – approved in the EU and heading for an FDA decision towards the end of January – plus two commercial NET imaging agents (NetSpot and Somakit) already generating revenues.

Added to that, the acquisition adds a pipeline of early-stage radionuclide candidates for other types of cancer, including several solid tumours including prostate cancer. AAA was spun out 15 years ago from Cern, the European nuclear research organisation.

Novartis has no heritage in this type of medicine but already markets two drugs for NET – Sandostatin (octreotide) and Afinitor/Votubia (everolimus) – so the acquisition makes sense from a franchise perspective, particularly as Sandostatin has now lost patent protection for the immediate-release formulation. The popularity of a long-acting version means it It’s still a big earner for Novartis however, with sales of around $1.2bn in the first nine months of this year, down just 4%.

Latterly Sandostatin has played second fiddle to Afinitor, which is rolling out in multiple NET tumour types including gastrointestinal and lung NET last year and brought in $1.1bn in the same period.

The Swiss big pharma company has been steadily bulking up in cancer via bolt-on acquisitions, for example by buying up GlaxoSmithKline’s oncology assets in 2015 in a $16bn deal, acquiring US biopharma Admune Therapeutics and announcing a string of licensing deals for cancer candidates, mainly in immuno-oncology.

Article by
Phil Taylor

7th December 2017

From: Sales

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