Novartis has agreed to acquire The Medicines Company, biopharmaceutical company focused on cardiovascular diseases, for $9.7 billion.

With the acquisition, Novartis would gain The Medicines Company’s investigational twice-yearly administered therapy in Phase III clinical development, inclisiran, for treating atherosclerotic heart disease and familial hypercholesterolemia, which results in high levels of low-density lipoprotein cholesterol (LDL-C). Inclisiran is a small interfering RNA (siRNA) therapy being studied to evaluate its ability to lower LDL-C. Inclisiran is designed to prevent the production of proprotein convertase subtilisin/kexin type 9 (PCSK9) at its primary source in the liver, which enhances the liver’s ability to remove LDL-C from the bloodstream, thereby lowering LDL-C levels. The Medicines Company expects to file regulatory submissions in the US in the fourth quarter of 2019 and in Europe in the first quarter of 2020.

Novartis says that inclisiran provides the company with a 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,” said the company in a November 24, 2019 press release.

The transaction has been unanimously approved by the Boards of Directors of both companies. Under the agreement, Novartis would acquire the company for $85.00 per share in cash, valuing the company at approximately $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 $60.33 and approximately 24% premium over The Medicines Company’s closing share price of $68.55 on November 22, 2019, which represented a fully diluted equity value of approximately $7.7 billion when including the impact of outstanding stock options and convertible debt. Under 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 $85.00 per share in cash.

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. 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.

With Novartis assuming completion of the deal in the first quarter of 2020, the company expects inclisiran to start to contribute the company, Novartis and its Innovative Medicines Division sales from 2021.

Source: Novartis, The Medicines Company