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Novartis acquires The Medicines Company for $9.7bn following takeover rumours

MedCo's cholesterol lowering inclisiran main attraction in planned acquisition

Novartis

Last week, The Medicines Company surged on reported rumours that Novartis was planning to acquire it – reports that have now been confirmed by the Swiss pharma. 

The takeover speculation followed a report from Bloomberg which suggested that other buyers were interested in MedCo, as it prepares to file for approval of inclisiran.

MedCo's PCSK9 inhibitor is a small, interfering RNA (siRNA) drug which works by blocking the synthesis of PCSK9 in the liver rather than targeting the protein itself.

This allows more receptors on the liver cell surfaced to capture LDL cholesterol to break down. By lowering LDL levels – so-called ‘bad’ cholesterol – the likelihood of major cardiac events decreases.

Its mechanism means it can be given as a subcutaneous injection initially, and then again at three months and every six months thereafter.

MedCo’s drug could pose a major challenge to established drugs in the class, including Amgen’s Repatha (evolocumab) and Sanofi/Regeneron’s Praluent (alirocumab).

Inclisiran has the benefit of a twice-yearly dosing schedule, and data demonstrating it can reduce cholesterol even in patients on maximum doses of statins. Repatha and Praluent are dosed more frequently – either monthly or bi-monthly.

Novartis has agreed to pay $9.7bn for the company – $85 per share – to add MedCo’s drug to its arsenal, as a means of restocking its pipeline. The pharma giant is betting on the growth potential of inclisiran – analysts have suggested that the drug could quickly grow to blockbuster sales levels if approved for a wide patient population.

Its rivals in the class, Repatha and Praluent, have struggled to grow mainly due to payer resistance, with their respective developers offering discounts from $14,000 per year at launch to around $6,000.

There is no indication as to what Novartis/MedCo will price inclisiran at if approved, but analysts have suggested it is likely to be priced at a discount to its rivals on launch.

Vas Narasimhan“The prospect of bringing inclisiran to patients fits with our overall strategy to transform Novartis into a focused medicines company and adds an investigational therapy with the potential to be a significant driver of Novartis’ growth in the medium to long term,” said Vas Narasimhan (pictured left), chief executive officer at Novartis.

According to Bloomberg analyst Sam Fazeli, inclisiran fits neatly into Novartis’ cardiovascular portfolio alongside Entresto (sacubitril/valsartan), its heart failure medicine which has grown since its launch to make $1.2bn this year so far.

The planned approval for inclisiran is set to be completed before the end of the year in the US, and in Europe in the first quarter of 2020, according to MedCo.

Assuming it is approved by the first quarter of 2020, Novartis expects inclisiran to start to contribute to group sales from 2021. Novartis has also said that the drug has the potential to become one of the largest products by sales in its portfolio.

Article by
Lucy Parsons

25th November 2019

From: Sales

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