In its second major bet on gene therapy in four months, Swiss drugmaker Novartis said Monday it will acquire AveXis for $8.7 billion, giving it a promising treatment for a pediatric neurological disorder.

Avexis’ AVXS-101 drug uses a gene therapy known as AAV9 to treat spinal muscular atrophy (SMA), an inherited disease caused by a defect in a single gene, the survival motor neuron (SMN1).

“We believe the medicine would have a multi-billion dollar peak sales potential,” Novartis CEO Vas Narasimhan told reporters.

Narasimhan is backing up that belief in a big way, agreeing to pay $218 a share for AveXis, representing an 88% premium over the closing price on Friday. The deal will be funded in part with the proceeds from Novartis’ $13 billion sale of its stake in a consumer healthcare joint venture to GlaxoSmithKline.

“We have a robust internal portfolio of gene therapies in ophthalmology and neuroscience in Novartis Institutes for Biomedical Research,” Narsimhan said. “And we look forward to using AveXis’s capabilities and technical development capabilities to be able to advance that portfolio.”

In the ophthalmology field, Novartis agreed in January to pay $105 million upfront and up to $65 million in milestone payments for rights to Spark’s Luxturna gene therapy for blindness outside the United States.

AVXS-101 uses AAV9 to deliver a functional copy of a human SMN gene to replace the defective gene without modifying the patient’s existing DNA. The one-time treatment is expected to provide an alternative to such products as Biogen and Ionis’ Spinraza, which requires ongoing therapy.

“Novartis is taking the view that AveXis’s … transgene approach trumps Biogen/Ionis’ approved Spinraza and other agents in development,” UBS analysts wrote.

Narasimhan said the deal would “broaden our leadership in neuroscience” and give Novartis a “gene therapy platform, in addition to our CAR-T platform for cancer, to advance a growing pipeline of gene therapies across therapeutic areas.”

‘”If Narasimhan’s bet pays off, Novartis will be uniquely well positioned to address cancer indications using CAR-Ts and treat neurological disorders with gene therapies,” FierceBiotech said.

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