NOVARTIS AG CHF0.50(REGD) Novartis To Acquire The Medicines Company For Usd 9.7 Bn, Adding Inclisiran, A Potentially Transfor...

 
TIDMNOVN 
 
 
   -- Over 50 million secondary prevention patients worldwide with 
      atherosclerotic cardiovascular disease (ASCVD) or familial 
      hypercholesterolemia (FH) on current standard of care do not achieve LDL 
      cholesterol (LDL-C) goal and remain at increased risk of cardiovascular 
      events1 
 
   -- First-in-class siRNA biological mechanism enables unique twice-yearly, 
      subcutaneous dosing regimen and seamless integration into routine 
      healthcare professional visits, potentially improving adherence and 
      patient outcomes2,3,4 
 
   -- Comprehensive Phase III inclisiran program showed potent and durable 
      reduction of >50% in LDL-C on top of standard of care, with excellent 
      safety profile2,3,4 
 
   -- Transaction expected to create significant value with soon-to-launch, 
      potentially first-in-class product that could become one of the largest 
      products by sales in Novartis portfolio, leveraging significant synergies 
      with existing global cardiovascular commercial capabilities 
 
   -- Highly efficacious, safe and convenient profile of inclisiran combined 
      with flexible market access strategies and value-based pricing can enable 
      broad access 
 
   -- Offer price of USD 85.00 per share in cash represents a premium of 
      approximately 41% over The Medicines Company's 30-day volume weighted 
      average price of USD 60.33; valuing the company at approximately USD 9.7 
      billion on a fully diluted basis 
 
   -- Novartis updates Innovative Medicines (IM) Division core margin outlook; 
      now expects to achieve mid-thirties in the near term and mid-to-high 
      thirties in the medium term 
 
 
   Basel, November 24, 2019 -- Novartis CEO Vas Narasimhan said: 
 
   "We are excited about entering into an agreement to acquire The 
Medicines Company as inclisiran is a potentially transformational 
medicine that reimagines the treatment of atherosclerotic heart disease 
and familial hypercholesterolemia. With tens of millions of patients at 
higher risk of cardiovascular events from high LDL-C, we believe that 
inclisiran could contribute significantly to improved patient outcomes 
and help healthcare systems address the leading global cause of death. 
The prospect of bringing inclisiran to patients also fits with our 
overall strategy to transform Novartis into a focused medicines company 
and adds an investigational therapy with the potential to be a 
significant driver of Novartis' growth in the medium to long term." 
 
   Novartis announced today that it has entered into an agreement and plan 
of merger with The Medicines Company (NASDAQ: MDCO) to acquire the 
US-based biopharmaceutical company for USD 85.00 per share in cash, 
valuing the company at approximately USD 9.7 billion on a fully diluted 
equity basis. The offer price represents a premium of approximately 41% 
over The Medicines Company's 30-day (to November 22, 2019) volume 
weighted average price of USD 60.33 and approximately 24% premium over 
The Medicines Company's closing share price of USD 68.55 on November 22, 
2019 which represented a fully diluted equity value of approximately USD 
7.7 billion when including the impact of outstanding stock options and 
convertible debt. The transaction has been unanimously approved by the 
Boards of Directors of both companies. 
 
   The Medicines Company recently announced data from its comprehensive 
clinical program consisting of three Phase III trials (ORION-9, 10 and 
11) for inclisiran involving over 3,600 high-risk patients with ASCVD 
and FH. In all trials, inclisiran demonstrated potent and durable LDL-C 
reduction with an excellent safety and tolerability profile(2,3,4) . 
Furthermore, inclisiran's potentially first-in-class, twice-yearly 
dosing schedule allows administration during patients' routine visits to 
their healthcare professionals and will likely contribute to improved 
patient adherence and sustained, lower LDL-C levels(2,3,4) . The 
Medicines Company expects to file regulatory submissions in the U.S. in 
the fourth quarter of 2019 and in Europe in the first quarter of 2020. 
An ongoing clinical trial (ORION-4) will evaluate the cardiovascular 
morbidity and mortality benefits of inclisiran(5) . 
 
   "Novartis has a longstanding history of delivering breakthrough 
cardiovascular treatments for patients, and I am very excited about the 
opportunity to add inclisiran to our cardiovascular portfolio," said 
Marie-France Tschudin, President, Novartis Pharmaceuticals. "This 
transformational, new investigational medicine has the potential to 
meaningfully address one of the largest areas of underserved patient 
need. We believe our strong capabilities and global footprint can help 
drive broad worldwide access to this much needed treatment." 
 
   Transaction fits long-term strategic goals 
 
   The planned acquisition of The Medicines Company would allow Novartis to 
continue building pipeline depth in a key therapeutic area -- a central 
pillar of its M&A strategy -- and is aligned with the Novartis strategic 
priority of delivering truly transformational medicines for patients. It 
would add a potentially first-in-class siRNA inhibitor targeting PCSK9 
with the potential to fundamentally change the treatment of elevated 
LDL-C in high risk patients(2,3,4) . Additionally, with The Medicines 
Company expecting to file regulatory submissions in the U.S. in the 
fourth quarter of 2019 and in Europe in the first quarter of 2020, 
inclisiran represents a near-term product launch opportunity and is 
expected to contribute to Group sales from 2021. Furthermore, broadening 
the cardiovascular portfolio would enable Novartis to leverage its core 
commercial capabilities including its strong cardiovascular field force 
both in the US and globally. Finally, the transaction is consistent with 
Novartis' capital allocation priorities to invest in transformative 
innovation and long term value creation for shareholders. 
 
   Financial highlights and updated IM Division margin outlook guidance 
 
   The offer price represents a premium of approximately 41% over The 
Medicines Company's 30-day volume weighted average price of USD 60.33 
and approximately 24% premium over The Medicines Company's closing share 
price of USD 68.55 on November 22, 2019 which represented a fully 
diluted equity value of approximately USD 7.7 billion when including the 
impact of outstanding stock options and convertible debt. 
 
   The transaction is expected to create significant value for patients, 
payers and Novartis shareholders. Assuming completion in the first 
quarter of 2020, Novartis expects inclisiran to start to contribute to 
Group and IM Division sales from 2021. It is also expected to further 
drive growth of the Cardiovascular-Renal-Metabolism franchise with the 
potential to become one of the largest products by sales in the Novartis 
portfolio, leveraging Novartis' global cardiovascular commercial 
capabilities. 
 
   The acquisition is expected to modestly dilute core EPS versus a no deal 
scenario during the next few years as the company invests for a 
successful launch of inclisiran. Novartis expects the transaction to be 
significantly accretive to Group core operating income and core EPS in 
the medium term, driven by sales growth and operational synergies, 
leveraging the worldwide footprint of the cardiovascular business. 
 
   Novartis expects to continue to expand IM Division core margins to reach 
mid-thirties in the near term, and mid to high-thirties in the medium 
term, while investing in launches, including inclisiran. This guidance 
assumes that no Gilenya(R) generics will enter the US market in 2020. 
 
   The core margin expansion for IM Division is driven by the continued 
sales momentum of key growth drivers, expected new launches as well as 
previously announced productivity programs. Novartis believes these 
factors will offset investments in new launches including inclisiran as 
well as the impact of generic erosion. 
 
   Transaction details 
 
   The transaction is expected to close in the first quarter of 2020, 
subject to the satisfaction or waiver of all closing conditions. Until 
closing, Novartis and The Medicines Company will continue to operate as 
separate and independent companies. 
 
   Under the terms of the agreement and plan of merger, Novartis will, 
through a subsidiary, commence a tender offer to purchase all 
outstanding shares of The Medicines Company for USD 85.00 per share in 
cash.  Following completion of the tender offer, Novartis expects to 
merge the acquiring subsidiary with The Medicines Company, resulting in 
The Medicines Company becoming an indirect wholly-owned subsidiary of 
Novartis. The transaction is subject to customary closing conditions, 
including antitrust clearance. 
 
   Novartis plans to finance the transaction through available cash and 
short- and long-term borrowings. 
 
   Investor call 
 
   A conference call for investors will take place on November 25, 2019 at 
7:00 CET. Details can be found at 
https://www.novartis.com/investors/event-calendar. 
 
   Additional information 
 
   This press release is neither an offer to purchase nor a solicitation of 
an offer to sell securities. The tender offer for the outstanding shares 
of common stock, par value USD 0.001, of The Medicines Company (the 
"Company") described in this press release has not commenced. At the 
time the tender offer is commenced, Novartis and its indirect 
wholly-owned subsidiary, 
 
   Medusa Merger Corporation ("Purchaser"),  will file, or will cause to be 
filed, a Schedule TO Tender Offer Statement with the U.S. Securities and 
Exchange Commission (the "SEC") and the Company will file a Schedule 
14D-9 Solicitation/Recommendation Statement with the SEC, in each case 
with respect to the tender offer. The Schedule TO Tender Offer Statement 
(including an offer to purchase, a related letter of transmittal and 
other offer documents) and the Schedule 14D-9 
Solicitation/Recommendation Statement will contain important information 

that should be read carefully when they become available and considered 
before any decision is made with respect to the tender offer. Those 
materials and all other documents filed by, or caused to be filed by, 
Novartis and Purchaser and the Company with the SEC will be available at 
no charge on the SEC's website at www.sec.gov. The Schedule TO Tender 
Offer Statement and related materials also may be obtained for free 
under the "Investors -- Financial Data" section of Novartis website at 
https://www.novartis.com/investors/financial-data/sec-filings. The 
Schedule 14D-9 Solicitation/Recommendation Statement and such other 
documents also may be obtained for free from the Company under the 
"Investors & Media" section of the Company's website at 
https://www.themedicinescompany.com/investor/financial/. 
 
   About Novartis in Cardiovascular-Renal-Metabolism 
 
   Bending the curve of life requires addressing some of society's biggest 
public health concerns. Novartis has an established and expanding 
presence in diseases covering the heart, kidney and metabolic system. In 
addition to essential treatment Entresto(R) (sacubitril/valsartan), 
Novartis has a growing pipeline of potentially first-in-class molecules 
addressing genetic cardiovascular risk factors, rare renal diseases and 
metabolic disorders. 
 
   About atherosclerotic cardiovascular disease 
 
   Atherosclerotic cardiovascular disease is the leading cause of death 
worldwide(6) . ASCVD results from a thickening and loss of elasticity in 
the arterial wall. It is a severe disorder and the leading cause of 
morbidity (sickness) and mortality (death) in most developed 
countries(7) . High levels of LDL-C build up on the walls of blood 
vessels. This buildup is called "plaque." As blood vessels build up 
plaque over time, the insides of the vessels narrow. This narrowing 
blocks blood flow to and from the heart and other organs and eventually 
causes heart disease or stroke(8) . 
 
   About familial hypercholesterolemia 
 
   Familial hypercholesterolemia (FH) is a genetic condition that leads to 
high cholesterol. People with FH have high levels of LDL-C as a result 
of a mutation in one gene that controls the way cholesterol is cleared 
by the body. High levels of LDL-C build up on the walls of the blood 
vessels and over time, the vessels narrow. This can lead to increased 
risk of heart attack or stroke. While lifestyle factors are important, 
for people with FH this isn't sufficient to control LDL-C(9) . 
 
   About inclisiran 
 
   Inclisiran, potentially the first and only cholesterol-lowering therapy 
in the siRNA (small-interfering RNA) class, is The Medicines Company's 
investigational twice-yearly therapy in Phase III clinical development 
to evaluate its ability to reduce low-density lipoprotein cholesterol 
(also known as LDL-C). As a siRNA, inclisiran harnesses the body's 
natural process of RNA interference to specifically prevent production 
of the PCSK9 protein in the liver, which enhances the liver's ability to 
remove LDL-C from the bloodstream, thereby lowering LDL-C levels(2,3,4) 
. Inclisiran is not yet approved by the FDA or any other regulatory 
authority. The Medicines Company obtained global rights to develop, 
manufacture and commercialize inclisiran under a license and 
collaboration agreement with Alnylam Pharmaceuticals, Inc. On January 
23, 2018, the FDA granted orphan drug designation to inclisiran for the 
treatment of homozygous familial hypercholesterolemia (HoFH)(10) . 
 
   About ORION clinical development program 
 
   Durable and potent LDL-C reduction with twice-yearly administration was 
demonstrated in three pivotal Phase III trials. ORION-11: showed a 54% 
LDL-C lowering with time-adjusted reductions of 50% sustained over 18 
months of treatment(2) . ORION-10: showed a 58% (observed) LDL 
cholesterol lowering with time-adjusted reductions of 56% sustained over 
18 months. ORION-10 met all primary and secondary endpoints, with 
profound, durable efficacy and excellent safety of inclisiran that were 
at least as favorable as observed in ORION-11(3,4) . ORION-9: met all 
primary and secondary efficacy endpoints, including durable and potent 
efficacy and excellent safety in a patient population where 
cardiovascular disease is most severe(4) . 
 
   In addition, inclisiran has a highly attractive dosing regimen. After an 
initial 3-month lead in, twice-yearly subcutaneous dosing thereafter 
applicable to all tested patients and subgroups. A clean long-term 
safety profile across a broad range of patient groups was observed. The 
benefit of inclisiran on cardiovascular outcomes is being assessed in an 
on-going 15 000 patient 5-year clinical trial (ORION-4)(5) . 
 
   Disclaimer 
 
   This press release contains forward-looking statements within the 
meaning of the United States Private Securities Litigation Reform Act of 
1995, that can generally be identified by words such as "to be commenced, 
" "to purchase," "to acquire," "to transform," "potential," "expected," 
"offers," "future," "ongoing," "would," "potentially," "believe," "can," 
"hopefully," "excited," "ambition," "priorities," "confidence," "to 
strengthen," "opportunity," "pending," "will," "expects," "subject to," 
"planned," "soon to launch," "transformational" or similar expressions, 
or by express or implied discussions regarding the potential outcome of 
the tender offer for the shares of The Medicines Company to be commenced 
by Novartis, and the potential impact on Novartis of the proposed 
acquisition, including express or implied discussions regarding 
potential future sales or earnings of Novartis, and any potential 
strategic benefits, synergies or opportunities expected as a result of 
the proposed acquisition; and regarding potential marketing or 
regulatory approvals for inclisiran, or regarding potential future 
revenues from such product.  You should not place undue reliance on 
these statements.  Such forward-looking statements are based on our 
current beliefs and expectations regarding future events, and are 
subject to significant known and unknown risks and uncertainties. 
Should one or more of these risks or uncertainties materialize, or 
should underlying assumptions prove incorrect, actual results may vary 
materially from those set forth in the forward-looking statements. 
There can be no guarantee that the proposed tender offer or the 
acquisition described in this press release will be completed, or that 
it will be completed as currently proposed, or at any particular time. 
Neither can there be any guarantee that Novartis or The Medicines 
Company's product, inclisiran, will achieve any particular future 
financial results, or that Novartis will be able to realize any of 
potential strategic benefits, synergies or opportunities as a result of 
the proposed acquisition.  Nor can there be any guarantee that 
inclisiran will be submitted or approved for sale in any market, or at 
any particular time.  Neither can there be any guarantee that such 
product will be successfully commercialized even if regulatory approvals 
are obtained.  In particular, our expectations could be affected by, 
among other things:  regulatory actions or delays or government 
regulation generally, including potential regulatory actions or delays 
relating to the completion of the potential acquisition described in 
this release, as well as potential regulatory actions or delays with 
respect to the development of inclisiran; the potential that the 
strategic benefits, synergies or opportunities expected from the 
proposed acquisition may not be realized or may take longer to realize 
than expected; the successful integration of The Medicines Company into 
the Novartis Group subsequent to the closing of the transaction and the 
timing of such integration; potential adverse reactions to the proposed 
transaction by customers, suppliers or strategic partners; dependence on 
key personnel of The Medicines Company; dependence on third parties to 
fulfill manufacturing and supply obligations; the uncertainties inherent 
in the research and development of new healthcare products, including 
clinical trial results and additional analysis of existing clinical 
data; our ability to obtain or maintain proprietary intellectual 
property protection; safety, quality, data integrity or manufacturing 
issues; global trends toward health care cost containment, including 
government, payer and general public pricing and reimbursement pressures 
and requirements for increased pricing transparency; the particular 
prescribing preferences of physicians and patients; uncertainties 
regarding actual or potential legal proceedings, including, among others, 
potential legal proceedings with respect to the proposed acquisition; 
and other risks and factors referred to in Novartis' current Form 20-F 
on file with the SEC.  Novartis is providing the information in this 
press release as of this date and does not undertake any obligation to 
update any forward-looking statements as a result of new information, 
future events or otherwise. 
 
   About Novartis 
 
   Novartis is reimagining medicine to improve and extend people's lives. 
As a leading global medicines company, we use innovative science and 
digital technologies to create transformative treatments in areas of 
great medical need. In our quest to find new medicines, we consistently 
rank among the world's top companies investing in research and 
development. Novartis products reach more than 750 million people 
globally and we are finding innovative ways to expand access to our 
latest treatments. About 109,000 people of more than 140 nationalities 
work at Novartis around the world. Find out more at 
 
   www.novartis.com. 
 
   Novartis is on Twitter. Sign up to follow @Novartis at 
http://twitter.com/novartisnews 
 
   For Novartis multimedia content, please visit 
www.novartis.com/news/media-library 
 
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   References 
 
 
   1. Novartis. Data on file 
 

   2. Raal FJ et al. Safety and Efficacy of Inclisiran in Patients With 
      Heterozygous Familial Hypercholesterolemia. Data presented at: AHA 
      Scientific Sessions 2019, Nov 16-18; Philadelphia, USA. 
 
   3. Wright RS et al. Inclisiran for subjects with ASCVD and elevated 
      low-density lipoprotein cholesterol. Data presented at: AHA Scientific 
      Sessions 2019, Nov 16-18; Philadelphia, USA 
 
   4. Ray K et al. Impact of inclisiran on LDL-C over 18 months in patients 
      with ASCVD or risk-equivalent. Data presented at: European Society of 
      Cardiology Congress, Aug 29 -- Sept 2; Paris, France 
 
   5. A Randomized Trial Assessing the Effects of Inclisiran on Clinical 
      Outcomes Among People With Cardiovascular Disease (ORION-4). Available 
      at: https://clinicaltrials.gov/ct2/show/NCT03705234. Last accessed: 
      November 19, 2019. 
 
   6. Barquera et al. Global Overview of the Epidimiology of Atherosclerotic 
      Cardiovascular Disease. Arch Med Res. 2015 Jul;46(5):328-38. 
 
   7. Canadian Heart Patient Alliance. What is ASCVD. Available at: 
      http://www.heartpatientalliance.ca/general-information/types-of-cardiovascular-disease/what-is-ascvd/. 
      Last accessed: November 19, 2019. 
 
   8. Centers for Disease Control and Prevention. LDL and HDL Cholesterol: 
      "Bad" and "Good" Cholesterol. Available at: 
      https://www.cdc.gov/cholesterol/ldl_hdl.htm. Last accessed: November 19, 
      2019. 
 
   9. Familial Hypercholesterolemia Foundation. What is Familial 
      Hypercholesterolemia. Available at: 
      https://thefhfoundation.org/familial-hypercholesterolemia/what-is-familial-hypercholesterolemia. 
      Last accessed: November 19, 2019. 
 
  10. US Food and Drug Administration. Available at: 
      https://www.accessdata.fda.gov/scripts/opdlisting/oopd/detailedIndex.cfm?cfgridkey=618017. 
      Last accessed: November 19, 2019. 
 
 
   # # # 
 
   Novartis Media Relations 
 
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