Novartis pushes deeper into nuclear medicine with US$2.1 billion deal

Novartis shares rise amid plans for cancer drug specialist purchase

Novartis shares rise amid plans for cancer drug specialist purchase

Novartis, whose shares were up 1.7 per cent at 0830 GMT, has agreed to pay $24 per share in cash for Endocyte, more than 15 times its value in September 2017 and a 54 per cent premium to Wednesday's closing price.

"We are thrilled that Novartis recognizes the potential for Lu-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 Mike Sherman, president and CEO of Endocyte.

Novartis, the Swiss drug maker, has agreed to buy the USA cancer-treatment provider Endocyte, for $US2.1 billion.

Completion of the transaction is expected in the first half of 2019.

Under the agreement, Novartis will acquire all outstanding shares of Endocyte common stock for $US24 apiece -totaling $US2.1 billion - in cash.

The treatment targets the prostate-specific membrane antigen (PSMA), present in the majority of patients with mCRPC, and has shown promising Phase II data, Novartis said.

There are now scant options for men with mCRPC and Novartis hopes to be able to meet the need of this group of patients. The deal would also enable Novartis to harness its research and development expertise to investigate the potential development of Lu-PSMA-617 for use in earlier lines of prostate cancer therapy.

"Novartis has a strong legacy of addressing unmet needs with transformative therapies and is building a leadership capability in new, technology-driven platforms that address some of the world's most complex health challenges, including cancer". AAA's radiopharmaceutical drugs are used to diagnose and treat cancer and other diseases. Earlier this year, Novartis boosted the lower end of its 2018 revenue outlook saying that revenue will increase by a mid-single-digit percentage from its previous forecast of a percentage in the low to mid-single digits.

Endocyte shares closed on Thursday at $23.40, up 50.39% on the day.