Novartis to Acquire Endocyte in Deal Worth $2.1 Billion

On Oct. 18, 2018, Novartis announced that it plans acquire Endocyte, a US-based biopharmaceutical company focused on targeted cancer therapeutics. Under the agreement, Novartis would acquire all outstanding shares of Endocyte common stock for $24 per share, or an equity value of $2.1 billion. In the transaction, Endocyte would be merged with a newly formed subsidiary of Novartis. 

The transaction is subject to customary closing conditions, including the approval of Endocyte's stockholders and receipt of regulatory approvals. Until closing, Endocyte will continue to operate as a separate and independent company. Novartis plans to fund the acquisition with available cash.

Endocyte uses drug conjugation technology to develop targeted therapies with companion imaging agents, including 177Lu-PSMA-617, a potential first-in-class investigational radioligand therapy (RLT) for treating metastatic castration-resistant prostate cancer (mCRPC). 177Lu-PSMA-617 targets the prostate-specific membrane antigen (PSMA) present in the majority of patients with mCRPC. It has shown promising Phase II data, the company reports. 177Lu-PSMA-617 is currently being investigated in a global Phase III clinical trial in men with mCRPC.

If completed, the Endocyte acquisition would expand the Novartis RLT platform with both a potential near-term product launch and early-stage clinical development programs. The deal would also give Novartis the opportunity to investigate the potential development of 177Lu-PSMA-617 for use in earlier lines of prostate cancer therapy.

"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," said Liz Barrett, CEO, Novartis Oncology, in a company press release.

Pipeline prospects

The Endocyte pipeline includes additional investigational RLTs, including 225Ac-PSMA-617 in preclinical studies for the treatment of mCRPC. Radiopharmaceuticals such as 177Lu-PSMA-617 are innovative medicinal formulations containing radioisotopes that are used clinically for both diagnosis and therapy.

Through the acquisition of Advanced Accelerator Applications (AAA), Novartis acquired Lutathera (lutetium Lu 177 dotatate / INN: lutetium (177Lu) oxodotreotide), a peptide receptor radionuclide therapy for treating somatostatin-receptor positive gastroenteropancreatic neuroendocrine tumors (GEP-NETs), an orphan disease.

Source: Novartis