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Novartis To Acquire Heart Drug Prospect Inclisiran The Medicines Co For $9.7 Billion

Novartis To Acquire Heart Drug Prospect Inclisiran The Medicines Co For $9.7 Billion
With the aim of rivaling cardiovascular medicines from Amgen Inc, Sanofi and Regeneron Pharmaceuticals, Swiss drugmaker Novartis has decided to acquire The Medicines Co , the owner of the heart drug prospect inclisiran, in a deal worth $9.7 billion hoping to take advantage of this medicine.
Under the deal, $85 per share in cash will be paid by Novartis which is 24 per cent greater than the closing stock price of The Medicines Co on Friday at $68.55 a share.
The cholesterol-lowering injection inclisiran is only drug in the kitty of the United States based biotechnology company The Medicines Co.
This deal is a clear indication of the business strategy of Novartis of focusing on cardiovascular medicines aimed at a market with potentially millions of patients and ready to spend billions for it, in addition to the market for rare disease treatments as it acquired the gene therapy specialist AveXis for $8.7 billion in 2018.
Even though it is still to get regulatory approval, the advantage for the inclisiran injection is that it is required to be taken only two times in a single year by doctors compared to those of its rivals which have much greater frequency such as the Amgen’s Repatha and Sanofi’s and Regeneron’s Praluent cholesterol-lowering drugs that require to be taken 26 times.
“We believe that will lead to less patient abandonment,” Novartis CEO Vas Narasimhan told investors on a call on Monday. “Payers will have confidence knowing that physician administration will ensure patient compliance.”
Repatha and Praluent are similar to inclisiran aim to inhibit PCSK9 proteins that lead to elevated levels of bad LDL cholesterol in people with heart disease. However the former two medicines have not been very successful because of a demanding dosing regiment as well as the high price of the treatment. This had forced the manufacturing companies to reduce the price to less than $6,000 annually.
an attractive return on investment will be produced by inclisiran, said a confident Narasimhan, and added that will be adding to the sale revenues of the company starting 2021 depending on approval of the drug by regulators and completion of the deal.
“We see returns well in excess of cost of capital,” Chief Financial Officer Harry Kirsch said. The acquisition is to be financed by one-third cash and two-thirds long-term borrowings.
According to the predictions of Basel-based Novartis, Inclisiran could turn out to one of its best-selling medicines, and added that the boards of the two companies have approved the deal.
The sales team that Novartis had created for boosting the sale of the slow selling Entresto will be leveraged by the company to push the sale of inclisiran, Narasimhan said.
Cardiovascular drugs have been the strong point of Novartis historically but lost out on market share in this segment after its bets selling drug that brought in $6 billion a year, Diovan, went out of the patent protection regimen in 2012. And till then the company had not been able to produce any innovative drug in its pipeline.

Christopher J. Mitchell

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