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Name | Symbol | Market | Type |
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Novartis AG | NYSE:NVS | NYSE | Depository Receipt |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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-0.09 | -0.09% | 103.22 | 103.55 | 102.9619 | 103.25 | 1,058,347 | 23:04:20 |
(Adds background, CEO comments.)
By Alberto Delclaux
Novartis AG (NOVN.EB) said Monday that it entered an agreement to buy U.S.-based gene-therapy company AveXis Inc. (AVXS) for $8.7 billion dollars as part of its neuroscience strategy.
The deal follows the recent sale of Novartis's stake in its consumer health-care joint venture to GlaxoSmithKline PLC (GSK.LN) for $13 billion. Novartis Chief Executive Vas Narasimhan said the AveXis transaction will be partly financed from proceeds of that sale.
The Swiss pharmaceutical company will pay $218 a share of AveXis in cash, an 88% premium to its closing price on April 6, and intends to fund the acquisition with available cash and short-term borrowing.
Looking ahead, Novartis said it expects the deal to slightly hit core operating income in 2018 and 2019 due to R&D investments. It said the acquisition should strongly benefit core operating income and core earnings a share as of 2020, however, driven by an increase in sales.
AveXis is a gene-therapy company conducting several clinical studies for the treatment of spinal muscular atrophy, or SMA, an inherited neurodegenerative disease caused by a defect in a single gene, Novartis said. Some form of SMA affects an estimated one out of every 6,000 to 10,000 children born, it said.
AveXis's gene therapy candidate AVXS-101 has the potential to be the first one-time gene replacement therapy for SMA, according to Novartis, and it currently has orphan drug designation from the U.S. Food and Drug Administration for the treatment of SMA.
"We would gain with the team at AveXis another gene therapy platform, in addition to our CAR-T platform for cancer, to advance a growing pipeline of gene therapies across therapeutic areas," said Mr. Narasimhan.
The transaction was unanimously approved by the boards of the two companies, Novartis said, and the deal is expected to close in mid-2018.
Write to Alberto Delclaux at alberto.delclaux@dowjones.com
(END) Dow Jones Newswires
April 09, 2018 02:45 ET (06:45 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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