Novartis, the Swiss pharmaceutical giant, has announced its agreement to acquire Chinook Therapeutics, a biotech firm based in Seattle, in a deal valued at up to $3.5 billion.
The acquisition aims to bolster Novartis’ late-stage drug development pipeline by adding a promising new treatment for a rare and severe kidney disease.
The transaction will take the form of a merger between a newly formed Novartis subsidiary and Chinook. The deal is expected to be finalized in the second half of 2023, pending regulatory approvals, as stated in a press release issued by Novartis on Monday.
As part of the agreement, Chinook shareholders will receive $3.2 billion in cash, equivalent to $40 per share, along with a contingent value right that could reach up to $300 million. The additional amount will be dependent on achieving certain regulatory milestones. Notably, Chinook’s shares closed at $23.99 on the preceding Friday, reflecting the substantial premium offered to shareholders as part of the acquisition.
Novartis CEO Vas Narasimhan, who has been leading the company’s efforts to streamline operations and focus on key therapeutic areas and promising markets, sees the acquisition as an opportunity to enhance the company’s potential for future blockbuster drugs. Narasimhan has previously expressed interest in exploring various deal opportunities, primarily targeting assets valued at less than $5 billion.
The acquisition of Chinook Therapeutics aligns with Novartis’ strategic vision to expand its portfolio in the field of rare diseases, particularly severe kidney conditions. By integrating Chinook’s innovative therapies into its pipeline, Novartis aims to address significant unmet medical needs and provide hope to patients suffering from these rare diseases.
Novartis expects the acquisition to complement its existing expertise and resources, further consolidating its position as a leading pharmaceutical company in the global healthcare industry. With the completion of the deal, Novartis aims to continue its mission of developing transformative treatments and improving the lives of patients worldwide.