Swiss pharmaceutical giant Novartis is making a big acquisition under its new chief executive, Vasant Narasimhan. The company announced that it would be buying U.S. cancer drug maker Endocyte Inc. for $2.1 billion, or $24 a share for the company, in cash.
Endocyte, which specializes in so-called radiopharmaceuticals, is developing a new treatment for prostate cancer. The company has a first-in-class investigational radioligand therapy (RLT) for the treatment of metastatic castration-resistant prostate cancer called 177Lu-PSMA-617.
Radiopharmaceuticals are drugs that help diagnose and target tumors and could be used to treat men with metastatic castration-resistant prostate cancer. These drugs carry radioactive substances directly to cancer cells so they can kill tumor cells at close range. Endocyte is currently conducting clinical trials for radiopharmaceuticals.
“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,” stated Novartis Oncology CEO Liz Barrett.
“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.”
“We are thrilled that Novartis recognizes the potential for 177Lu-PSMA-617 to change the treatment landscape for men with metastatic castration-resistant prostate cancer (mCRPC), as well as the broader role that RLTs may potentially play in the treatment of cancer,” said Endocyte CEO Mike Sherman.
He added, “The global reach and expertise of Novartis in developing and commercializing [radioligand] therapies will be critical in efforts for patients to benefit from these therapies as quickly as possible.”
After the deal closes, Novartis said it would harness research and expertise to investigate the development of Endocyte’s 177Lu-PSMA-617.
Endocyte shares are up a staggering 400% this year so far and jumped 50% on the news of Novartis acquiring the company.