Novartis AG Rumored to Have Approached This $2.6 Billion Radiopharma Firm

Published: Sep 28, 2017

Novartis AG Rumored to Have Approached This $2.6 Billion Radiopharma Firm September 28, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Switzerland-based Novartis AG is reportedly in talks to acquire Advanced Accelerator Applications SA (AAAP). According to Bloomberg, citing unidentified source, Novartis has already approached AAA, as it is known.

Headquartered in Saint-Genis-Pouilly, France, AAA develops, markets and sells products for molecular nuclear medicine (MNM), such as those used in PET and SPECT imaging systems. The company’s lead investigational therapeutic candidate is lutetium Lu 177 dotatate (Lutathera), a Lutetium-177-labled somatostatin analogue peptide being developed for neuroendocrine tumors. It is currently under review by both the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA).

AAA has 21 production and R&D facilities and employs 530 people in 13 countries, including the U.S., UK, Belgium, Canada, France, Germany, Israel and others. It has a market valuation of about $2.6 billion.

The company was spun out of the European Organization for Nuclear Research (CERN) in 2002.

In June, Novartis announced its plans to reshape the company, which largely revolved around efforts to expand into immuno-oncology, develop and launch biosimilars, and some strategic mergers and acquisitions. Earlier this month, Joseph Jimenez, the company’s chief executive officer since 2010, indicated he will be stepping down at the end of January 2018. He will be replaced by Vasant (Vas) Narasimhan, currently the company’s global head of Drug Development and chief medical officer.

Although it remains to be seen, many expect Narasimhan will focus on the company’s internal research-and-development efforts.

On Aug. 25, Novartis licensed the worldwide commercial rights to gevokizumab from XOMA Corporation for $31 million upfront, a $5 million equity investment, and pre- and post-commercialization milestones, as well as tiered high-single to mid-double-digit royalties on net sales. The compound is a monoclonal antibody with the potential to treat a variety of inflammatory and other diseases.

Novartis has another deal with XOMA. The other grants Novartis a license to XOMA’s intellectual property for IL-1 beta for cardiovascular diseases. Also, Novartis agreed to settle XOMA’s 12 million euro debt to Les Laboratoires Servier and extend the maturity date on its debt to Novartis pushing it from September 2020 to September 20022.

Bloomberg notes, “Novartis has announced more than $30 billion in deals over the past four years, the largest being its 2015 acquisition of GlaxoSmithKline Plc ’s oncology portfolio for as much as $16 billion, according to data compiled by Bloomberg. Jimenez has previously said the company is focusing on potential acquisitions of $2 billion to $5 billion. The company has hired Keren Haruvi Snir from Teva Pharmaceutical Industries Ltd. as its head of mergers and acquisitions, people familiar with the matter have said.”

Advanced Accelerator Applications has had a strong climb over the last year. On Dec. 22, 2016, shares traded for $23.71. Shares are currently trading for $64. Much of the growth appears related to the promise of Lutathera for neuroendocrine tumors.

Bloomberg writes, “AAA sold the rights at $16 each in a U.S. initial public offering in 2015. The company’s second-biggest shareholder after Fidelity Investments is HBM Healthcare Investments AG, a publicly traded Swiss investment fund that bought a stake before the IPO.”

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