Novartis Plunks Down $2.1 Billion for Endocyte
Shares of Indiana-based Endocyte have shot up more than 50 percent in pre-market trading after Swiss pharma giant Novartis announced it was acquiring the company for $2.1 billion in cash. The deal will allow the company to expand its radiopharmaceuticals business.
The deal was announced weeks after Endocyte announced the U.S. Food and Drug Administration (FDA) accepted radiographic progression-free survival as an alternative primary endpoint in its Phase III VISION trial, which will examine the company’s Lu-PSMA-617 program for the treatment of metastatic castration-resistant prostate cancer (mCRPC). The rPFS endpoint will be in addition to overall survival.
In its announcement this morning, Novartis said Lu-PSMA-617 is a potential first-in-class therapy for mCRPC. Endocyte’s investigational drug targets the prostate-specific membrane antigen (PSMA), present in the majority of patients with mCRPC. Earlier this year Endocyte released Phase II data that showed patients dosed with Lu-PSMA-617 saw high rates of PSA response, even those patients who had been heavily pretreated.
Novartis said the acquisition of Endocyte will expand its RLT platform with both a potential near-term product launch and early-stage clinical development programs. The company said it will also allow Novartis to investigate Lu-PSMA-617 as a potential treatment for earlier lines of prostate therapy.
Liz Barrett, chief executive officer of Novartis Oncology, said the acquisition of Endocyte builds on the company’s growing capability in radiopharmaceuticals. She noted that is expected to become an increasingly important treatment option for patients, as well as a key growth driver for the company’s oncology business. Radiopharmaceuticals like Endocyte’s Lu-PSMA-617 are innovative medicinal formulations containing radioisotopes used clinically for both diagnosis and therapy.
“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,” Barrett said in a statement.
The acquisition of Endocyte comes about a year after Novartis snapped French cancer firm Advanced Accelerator Applications in a $3.9 billion acquisition that provided a key radioligand therapy – Lutathera, the first ever approved Peptide Receptor Radionuclide Therapy. Lutathera was approved in January for the treatment of somatostatin-receptor positive gastroenteropancreatic neuroendocrine tumors (GEP-NETs), an orphan disease.
Mike Sherman, Endocyte’s CEO, said the company is thrilled that Novartis sees potential for Lu-PSMA-617 to change the treatment landscape for mCRPC, as well as the broader role that radioligand therapies could play in cancer.
“The global reach and expertise of Novartis in developing and commercializing RLT therapies will be critical in efforts for patients to benefit from these therapies as quickly as possible,” Sherman said in a statement.
Under terms of the deal, Novartis will acquire Endocyte stock for $24 per share, a premium of 54 percent to Endocyte’s closing price of $15.56 on Wednesday. The deal is expected to close in the first half of 2019.