Novartis to buy cancer drug firm Endocyte for $2.1bn

Novartis has announced plans to buy cancer drug firm Endocyte for $2.1 billion cash.

The Swiss pharma giant is buying the US-based Endocyte to expand its radiopharmaceuticals business.

News of the plans sent Endocyte’s shares rocketing by 49.74% to $23.30 in pre-market trading

The Endocyte acquisition, when finalised, would expand the Novartis radioligand therapy (RLT) platform with both a potential near-term product launch and early-stage clinical development programmes.

The transaction would be in the form of a merger between Endocyte and a newly formed Novartis subsidiary.

Novartis hopes to be able to push forward the development of its investigational therapy 177Lu-PSMA-617 for use in earlier lines of prostate cancer therapy.

Endocyte’s specialism is the development of radiopharmaceuticals, which are a new type of drug that can carry radioactive substances directly to cancer cells to kill tumour cells at close range.

Lu-PSMA-617 targets the prostate-specific membrane antigen (PSMA), present in the majority of patients with metastatic castration-resistant prostate cancer (mCRPC), and has shown promising phase 2 data.

There are currently scant options for men with mCRPC and Novartis hopes to be able to meet the need of this group of patients.

Liz Barrett, CEO, Novartis oncology, said: “Novartis has a strong legacy of addressing unmet needs with transformative therapies and is building a leadership capability in new, technology-driven platforms that address some of the world’s most complex health challenges, including cancer.

“Today’s announcement about the proposed acquisition of Endocyte builds on our growing capability in radiopharmaceuticals, which is expected to be an increasingly important treatment option for patients and a key growth driver for our business.

“We are also excited about the opportunity to break into the prostate cancer arena with a near-term product that has the potential to make a meaningful impact for patients in great need of more options.”

Until the deal is finalised, Endocyte will continue to operate as a separate and independent company.

Last year, Novartis agreed to buy Advanced Accelerator Applications (AAA) for about $3.9 billion in cash. AAA’s radiopharmaceutical drugs are used to diagnose and treat cancer and other diseases.