Healthineers offers €200m for Novartis radiodiagnostics unit
Specialists on radioligand therapy production line
Siemens Healthineers has agreed a €200 million ($224 million) deal to buy the diagnostic arm of Novartis' Advanced Accelerator Applications (AAA) radiopharma unit, boosting its medical imaging business.
The deal – originally reported by the Financial Times and confirmed by Novartis and Siemens Healthineers over the weekend without giving the value of the transaction – would leave Novartis holding only the radiotherapeutics operations of AAA, which it bought for $3.9 billion in 2017 to underpin its move into the radiopharma category.
The Swiss pharma group said it would continue to work with Siemens Healthineers to support and supply its radioligand therapies (RLTs), which include Lutathera (lutetium [Lu177] dotatate) for GEP-NET tumours, prostate cancer treatment Pluvicto (lutetium [Lu177] vipivotide tetraxetan), and experimental therapies for various other solid tumours.
AAA runs a network of cyclotrons in Europe that are used to manufacture the radioisotopes which are used clinically in products for both diagnosis and therapy. While the diagnostics are often used in tandem with therapeutics, Novartis said that it would be better if AAA's diagnostics business was run by a company dedicated to that area.
Siemens Healthineers – which was spun out of the Siemens electronics group several years ago – specialises in medical imaging technologies, lab diagnostics, and other ancillary services like healthcare IT and digital health platforms. It has said the deal will shore up its supply of radioisotopes used in medical imaging technologies like PET scanners, one of its core businesses.
The proposed transaction is subject to the usual regulatory approvals as well as negotiations with Novartis' works council, and if all goes to plan is expected to be completed in the final quarter of this year.
Novartis has made radiopharma one of the pillars of its business, adding Lutathera through the AAA acquisition and Pluvicto via its $2.1 billion purchase of Endocyte in 2019, whilst growing its pipeline with other deals such as a $1.75 billion offer for Mariana Oncology in May that has yet to complete.
Lutathera made $605 million in sales last year, but Novartis reckons new data as a first-line therapy for GEP-NET could drive sales above the $1 billion threshold, with additional upside if it also gets approved for other solid tumours like brain cancer glioblastoma and small cell lung cancer (SCLC).
Pluvicto meanwhile brought in $980 million in 2023, and Novartis is modelling peak sales above $2 billion if it expands into earlier lines of therapy in PSMA-positive metastatic castration-resistant prostate cancer (mCRPC), as well as metastatic hormone-sensitive prostate cancer.
