Novartis shares rise amid plans for cancer drug specialist purchase

Novartis to buy cancer drugmaker Endocyte for $2.1 bln in cash

Endocyte, Inc. (NASDAQ: ECYT) on Thursday announced its $2.1-billion cash sale to Novartis AG (NYSE: NVS).

Since taking over in February, Narasimhan has shed over-the-counter medicines and generic pills while pushing a spinoff of Novartis's Alcon eyecare unit come 2019. The company bought another company that works in the field, France's Advanced Accelerator Applications, for $3.9 billion a year ago.

Novartis has entered into an agreement and plan of merger with Endocyte, a US -based biopharmaceutical company focused on developing targeted therapeutics for cancer treatment. Sales rose 3% to $12.78 billion, compared to the average forecast of $12.84 billion in the poll.

"Net sales revised upwards, expected to grow mid-single digit (cc); core operating income guidance confirmed, expected to grow mid to high-single digit (cc)", Novartis said in its earnings release.

But analysts said investors were keener on Narasimhan's progress in recasting the broad European healthcare giant that former Chairman Daniel Vasella envisioned before his 2013 exit into a focused, data-driven drug maker.


The companies expect the takeover to close in the first half of next year, pending approval by regulators and Endocyte's shareholders, who would receive $24 per share-which is 54% more than Endocyte's closing price on Wednesday.

It's worth pointing out that buying Endocyte also gives Novartis an additional platform in CAR-T cancer immunotherapy to complement its current assets, including already-marketed therapy Kymriah (tisagenlecleucel) for CD19-positive blood cancers. "With Endocyte, we saw a great fit".

Its small molecule drug conjugates are actively target receptors that are over-expressed on diseased cells.

If completed, Novartis will gain rights to Endocyte's Lu-PSMA-617, an investigational radioligand therapy (RLT) for the treatment of metastatic castration-resistant prostate cancer (mCRPC).

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