Market Updates

Novartis-Avexis: An Acquisition Deal for $8.7 billion

August, 2018

Novartis-Avexis: An Acquisition Deal for $8.7 billion

Gene therapy is a novel treatment method, that involves the introduction of genetic material or gene as therapeutic molecules using a viral vector carrier. Based on the therapeutic approach, the oligonucleotide sequence is either integrated into the chromosome or is expressed within the cell. The concept of gene therapy ascended during the 1960s and 1970s and was first tried over two decades ago on four-year-old girl who has congenital disease called adenosine deaminase (ADA) deficiency at NIH Clinical Center. It is used in the therapeutics of numerous disease caused by single genetic defect, such as haemophilia, spinal muscular atrophy and blindness, resulting in the launch and licensing of novel therapies.

An acquisition aims Novartis to become a leader in gene therapy

Switzerland based pharmaceutical giant, Novartis International AG entered in to a deal in April 2018, to acquire US based clinical stage gene therapy company, Avexis Inc for 218 per share ($8.7bn in cash). The company has numerous ongoing clinical trials to treat spinal muscular atropy (SPA), a congenital neurodegenerative disease caused by a single gene error, the survival motor neuron (SMN1). Avexis is developing the gene therapy candidate, AVXS-101, that has highly compelling clinical data in treating SMA Type 1, which is the topmost genetic cause of death in newborns. SMA is a genetic disease that affects part of nervous system characterized by progressive muscle wasting and loss of motor neurons and according to the estimation, one in 6 to 10 thousand infants born is affected by some form of SMA.

In August 2017, Novartis received first FDA approval for a CAR-T cell therapy, Kymriah, for the treatment of patients with acute lymphoblastic leukemia (ALL) that is refractory or in second or later relapse. AVXS-101, the gene therapy candidate of AveXis, if approved by US FDA will be a first-in-class one-time therapy that addresses the root genetic cause of SMA by successfully replacing the faulty SMN1 gene.

The CEO of Novartis stated, "The proposed acquisition of AveXis offers an extraordinary opportunity to transform the care of SMA. We believe AVXS-101 could create a lifetime of possibilities for the children and families impacted by this devastating condition.

“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.”

The deal is expected to happen after Novartis sold its $13bn-stake in a consumer health joint venture to GlaxoSmithKline, allowing the company to focus more on the development and growth of its core businesses.

– Arpitha Shetty
 Market Research Analyst
Infoholic Research