Novartis To Acquire Gene-Therapy Company AveXis for $8.7 Billion

By Akia Thorpe -

April 10, 2018

Novartis has signed an agreement and plan of merger to acquire AveXis, a Bannockburn, Illinois-headquartered clinical-stage gene-therapy company, for $218 per share or a total of $8.7 billion in cash.

AveXis has several ongoing clinical studies for treating spinal muscular atrophy (SMA), an inherited neurodegenerative disease caused by a defect in a single gene, the survival motor neuron. AveXis’ lead gene-therapy candidate, AVXS-101, has clinical data in treating SMA Type I.

"The proposed acquisition of AveXis offers an extraordinary opportunity to transform the care of SMA,” said Vas Narasimhan, chief executive officer of Novartis, in an April 9, 2018 company statement. “The acquisition would also accelerate our strategy to pursue high-efficacy, first-in-class therapies and broaden our leadership in neuroscience. 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. We look forward on the closing of the deal to a smooth transition for AveXis employees and welcoming them to Novartis."

The US Food and Drug Administration (FDA) has granted AVXS-101 orphan drug designation for treating SMA as well as breakthrough therapy designation for SMA Type I. A biologics license application filing with the FDA for AVXS-101 is expected in the second half of 2018, and the companies expect approval and launch in the US in 2019.

Additionally, AveXis offers adeno-associated virus serotype 9 (AAV9) gene-therapy manufacturing capabilities and research & development (R&D) capabilities, which in addition to AVXS-101, includes other pipeline products for Rett syndrome, a neurological disorder, and a genetic form of amyotrophic lateral sclerosis caused by mutations in the superoxide dismutase 1 gene. AAV9 is a gene-delivery platform for diseases of the central nervous system.

Under the agreement, Novartis has formed an acquisition subsidiary, Novartis AM Merger Corporation (i.e., Purchaser), which will commence a tender offer to purchase all outstanding shares of AveXis for $218 per share. The transaction was unanimously approved by the boards of both companies. Following the completion of the tender offer, Novartis expects to consummate a merger of Purchaser and AveXis in which shares of AveXis that have not been purchased in the tender offer will be converted into the right to receive the same cash price per share as paid in the tender offer (other than shares held by stockholders who properly demand and perfect appraisal rights under Delaware law). The tender offer and the merger are subject to customary closing conditions, including the tender of at least a majority of outstanding AveXis shares on fully diluted basis and the expiration or termination of the waiting period under the Hart Scott Rodino Antitrust Improvements Act. The transaction to acquire AveXis is planned to be funded through available cash and short-term borrowing.

The transaction is expected to close in mid-2018, pending the fulfilment of the tender offer and all other closing conditions.

Source: Novartis and AveXis