Swiss drugmaker Novartis has agreed to acquire AveXis, a US-based clinical stage gene therapy company, for $8.7bn in an all-cash deal.
As per the deal that has been approved unanimously by the boards of the two companies, Novartis will pay $218 for each share of AveXis.
The deal will allow Novartis to grow its position in the gene therapy and neuroscience areas.
AveXis is currently carrying out several clinical studies for the treatment of spinal muscular atrophy (SMA), a neurodegenerative disease that is inherited due to a defect in a single gene called the survival motor neuron.
AveXis’ lead gene therapy candidate is AVXS-101, which has been granted orphan drug designation from the US Food and Drug Administration (FDA) for the treatment of SMA.
The US regulator has also granted breakthrough therapy designation to AVXS-101 for SMA Type 1, which is considered to be the top genetic cause of death among infants.
Novartis CEO Vas Narasimhan said: "The proposed acquisition of AveXis offers an extraordinary opportunity to transform the care of SMA. We believe AVXS-101 could create a lifetime of possibilities for the children and families impacted by this devastating condition.
“The acquisition would also accelerate our strategy to pursue high-efficacy, first-in-class therapies and broaden our leadership in neuroscience.”
Other than AVXS-101, AveXis has a pipeline of other products for Rett Syndrome (RTT) and a genetic type of amyotrophic lateral sclerosis (ALS) resulting from mutations in the superoxide dismutase 1 (SOD1) gene.
AveXis president and CEO Sean Nolan said: “The commitment, drive and expertise of the entire AveXis team has created significant stockholder value, and we are pleased that Novartis recognizes that value in the potential of AVXS-101, our first in class manufacturing capabilities and our gene therapy pipeline, all of which serve to transform the lives of people devastated by rare and life threatening neurological diseases such as SMA, Rett syndrome and genetic ALS.”
The acquisition is anticipated to be completed in the middle of this year, provided it successfully fulfils the tender offer and satisfies all other closing conditions.
Recently, Novartis reached an agreement to sell its 36.5% stake in its consumer healthcare joint venture to GlaxoSmithKline for $13bn.
Image: Novartis headquarters in Basel, Switzerland. Photo: courtesy of Novartis AG.