No­var­tis CEO Vas Narasimhan cuts loose an old an­chor and sets sail with $8.7B AveX­is buy­out

Vas Narasimhan is start­ing his tenure as CEO of No­var­tis $NVS with a bold move on the gene ther­a­py front.

The phar­ma gi­ant has struck a deal to buy AveX­is for $8.7 bil­lion in cash, scoop­ing up the biotech as it looks to par­lay im­pres­sive ear­ly-stage re­sults for their gene ther­a­py AVXS-101 for spinal mus­cu­lar at­ro­phy in­to a swift FDA ap­proval.

The deal reg­is­ters at $218 a share $AVXS, al­most dou­ble AveX­is’ Fri­day close. And it un­der­scores a few key points about Narasimhan’s man­age­ment style.

First, the phar­ma gi­ant chief is clear­ly will­ing to jump out of its cau­tious sweet spot of $2 bil­lion to $5 bil­lion for bolt-ons, brush­ing off their well tai­lored dis­taste for pay­ing big pre­mi­ums to grab a front run­ner in drug de­vel­op­ment. And Narasimhan, at 41, is serv­ing no­tice that af­ter win­ning an his­toric CAR-T ap­proval, he in­tends to keep No­var­tis out front on cell and gene ther­a­py, come what may.

No­var­tis is play­ing R&D like a big biotech, will­ing to in­vest bil­lions in new tech­nolo­gies to leap out ahead of ri­vals. And that could prove in­flu­en­tial as ma­jor play­ers like GSK and Eli Lil­ly try to blaze new R&D paths of their own in Big Phar­ma. Biotech M&A has been rolling along this year in the wake of deals for Kite and Juno, ri­vals to No­var­tis, as well as a like­ly bid for Shire by Take­da.

No­var­tis’ spot­light­ed its in­ten­tions in lead­ing the gene ther­a­py field with a re­cent $170 mil­lion deal to li­cense ex-US rights to Spark’s Lux­tur­na, which won a land­mark FDA ap­proval for treat­ing RPE65 mu­ta­tion-as­so­ci­at­ed cas­es of reti­nal dy­s­tro­phy.

“The pro­posed ac­qui­si­tion of AveX­is of­fers an ex­tra­or­di­nary op­por­tu­ni­ty to trans­form the care of SMA…,” said Narasimhan in a state­ment. “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.”

In­vestors liked the sound of it. No­var­tis shares surged 0.75% in ear­ly morn­ing trad­ing.

Last No­vem­ber AveX­is riv­et­ed the biotech world with da­ta from a small study on SMA. Of 15 pa­tients in Phase I, all were able to reach 20 months with­out the need for con­stant res­pi­ra­to­ry sup­port, or dy­ing. And many achieved im­prove­ments in mo­tor symp­toms, speak­ing to the po­ten­tial — though still un­proven — of this as a once-and-done ther­a­py for a rare but dire ail­ment.

AveX­is CEO Sean Nolan

AveX­is went on to forge plans to sit down with reg­u­la­tors in Q2 for a pre-BLA meet­ing as they ham­mered out a strat­e­gy to gain the fastest pos­si­ble mar­ket­ing ap­proval for their ther­a­py, which could blow Spin­raza, a new and ex­pen­sive SMA ther­a­py from Bio­gen and Io­n­is, out of the wa­ter. That dis­ap­point­ed some back­ers who had ex­pect­ed the biotech to start a rolling sub­mis­sion at the be­gin­ning of Jan­u­ary with the FDA sig­nal­ing its in­ter­est in snap ap­provals for rare dis­eases.

No­var­tis says that the com­pa­ny ex­pects their deal will close mid-year, set­ting up a BLA fil­ing in the sec­ond half and a mar­ket launch in 2019.

That’s al­so good news for Re­genxbio $RGNX, which ex­pand­ed its tech li­cens­ing deal with AveX­is a few months ago to in­clude an ex­clu­sive li­cense cov­er­ing SMA. Re­genxbio gets $140 mil­lion in cash and near-term fees, $120 mil­lion in mile­stones and roy­al­ties. That was al­so worth a 23% spike in its share price.

If AveX­is de­cides not to go through with it, they would need to pay a $284 mil­lion breakup fee, with No­var­tis on the hook for $437 mil­lion for a re­verse ter­mi­na­tion fine. And some an­a­lysts think that this could still turn in­to a bid­ding war. Notes Jef­feries’ Biren Amin:

There’s been spec­u­la­tion that Bio­gen may need to eval­u­ate Avex­is at some point and may be this will be a trig­ger that forces it to do so. Bio­gen has in­di­cat­ed it has a SMA gene ther­a­py in pre­clin­i­cal de­vel­op­ment, and plans to move in­to the clin­ic in 2018. Ad­di­tion­al­ly, we’ve al­ways felt Roche could have an in­ter­est in AVXS giv­en its de­vel­op­ment pro­gram with RG7916 (an­oth­er oral ad­min­is­tered SMN2 splic­ing mod­i­fi­er) and the fact that AVXS Chair­man Dan Welch was the CEO of In­ter­mune when Roche pur­chased In­ter­mune in 2014 for $8.3B.

For now, though, it’s full speed ahead.

“The com­mit­ment, dri­ve and ex­per­tise of the en­tire AveX­is team has cre­at­ed sig­nif­i­cant stock­hold­er val­ue, and we are pleased that No­var­tis rec­og­nizes that val­ue in the po­ten­tial of AVXS-101, our first in class man­u­fac­tur­ing ca­pa­bil­i­ties and our gene ther­a­py pipeline, all of which serve to trans­form the lives of peo­ple dev­as­tat­ed by rare and life threat­en­ing neu­ro­log­i­cal dis­eases such as SMA, Rett syn­drome and ge­net­ic ALS,” said Sean Nolan, the CEO of AveX­is. “With world­wide reach and ex­ten­sive re­sources, No­var­tis should ex­pe­dite our shared vi­sion of bring­ing gene ther­a­py to these pa­tient com­mu­ni­ties across the globe as quick­ly and safe­ly as pos­si­ble.”


Im­age: Vas Narasimhan. NO­VAR­TIS

A new era of treat­ment: How bio­mark­ers are chang­ing the way we think about can­cer

AJ Patel was recovering from a complicated brain surgery when his oncologist burst into the hospital room yelling, “I’ve got some really great news for you!”

For two years, Patel had been going from doctor to doctor trying to diagnose his wheezing, only to be dealt the devastating news that he had stage IV lung cancer and only six months to live. And then they found the brain tumors.

“What are you talking about?” Patel asked. He had never seen an oncologist so happy.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

David Ricks, Eli Lilly CEO (David Paul Morris/Bloomberg via Getty Images)

Eli Lil­ly set to in­vest $2.1B in home state man­u­fac­tur­ing boost

Eli Lilly is looking to expand its footprint in its home Hoosier State by making a major investment in manufacturing.

The pharma is investing $2.1 billion in two new manufacturing sites at Indiana’s LEAP Lebanon Innovation and Research District in Boone County, northwest of Lilly’s headquarters in Indianapolis.

The two new facilities will expand Lilly’s manufacturing network for active ingredients and new therapeutic modalities, including genetic medicines, according to a press release.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 142,700+ biopharma pros reading Endpoints daily — and it's free.

Pfiz­er and CD­MOs ramp up Paxlovid man­u­fac­tur­ing with Kala­ma­zoo plant ex­pan­sion lead­ing the way

As the Covid-19 pandemic continues to evolve, pharma companies and manufacturers are exploring how to step up production on antivirals.

Pfizer is planning to expand its Kalamazoo-area facility to increase manufacturing capabilities for the oral Covid-19 antiviral Paxlovid, according to a report from Michigan-based news site MLive. The expansion of the facility, which serves as Pfizer’s largest manufacturing location, is expected to create hundreds of “high-skilled” STEM jobs, MLive reported. No details about the project’s cost and timeline have been released, but according to MLive, Pfizer will announce the details of the expansion at some point in early June.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 142,700+ biopharma pros reading Endpoints daily — and it's free.

FDA spells out the rules and re­stric­tions for states seek­ing to im­port drugs from Cana­da

The FDA is offering more of an explanation of the guardrails around its program that may soon allow states to import prescription drugs in some select circumstances from Canada, but only if such imports will result in significant cost reductions for consumers.

While the agency has yet to sign off on any of the 5 state plans in the works so far, and PhRMA’s suit to block the Trump-era rule allowing such imports is stalled, the new Q&A guidance spells out the various restrictions that states will have to abide by, potentially signaling that a state approval is coming.

Pfizer CEO Albert Bourla at the World Economic Forum (Gian Ehrenzeller/Keystone via AP Images)

All about ac­cess: Pfiz­er moves to a non-prof­it mod­el for drug sales in 45 low­er-in­come coun­tries

Leading the way to increase access to cheaper drugs worldwide, Pfizer said Wednesday it will provide all current and future patent-protected medicines and vaccines available in the US or EU on a not-for-profit basis to about 1.2 billion people in 45 lower-income countries.

Rwanda, Ghana, Malawi, Senegal and Uganda are the first five countries to sign on to this accord, which will also seek to blaze new paths for quick and efficient regulatory and procurement processes to reduce the usual delays in making new medicines and vaccines available in these countries.

US sees spike in Paxlovid us­age as Mer­ck­'s mol­nupi­ravir and As­traZeneca's Evusheld are slow­er off the shelf

New data from HHS show that more than 162,000 courses of Pfizer’s Covid-19 antiviral Paxlovid were administered across the US over the past week, continuing a streak of increased usage of the pill, and signaling not only rising case numbers but more awareness of how to access it.

In comparison to this week, about 670,000 courses of the Pfizer pill have been administered across the first five months since Paxlovid has been on the US market, averaging about 33,000 courses administered per week in that time.

Te­va, Al­ler­gan reach yet an­oth­er opi­oid set­tle­ment — ef­fec­tive­ly end­ing WV tri­al

Teva and Allergan have reached settlements with multiple states over their involvement in the opioid crisis. Their latest is worth 9 figures.

West Virginia attorney general Patrick Morrisey announced the newest settlement, worth $161.5 million, at a press conference on Wednesday. The deal would resolve claims that the companies helped fuel the state’s opioid epidemic. If it goes through, it could become the largest state-negotiated settlement in West Virginia’s history, according to Reuters.

Roche un­veils three new mon­key­pox tests as cas­es rise

Health experts maintain that the current monkeypox situation is a stark contrast to Covid. Even so, a handful of biotechs have sprung to action, including Roche, who quickly developed a set of three tests to detect the virus.

Roche and subsidiary TIB Molbiol unveiled their Lightmix Modular Virus test kits on Wednesday — three unique test kits that can help track the spread of monkeypox.

The first kit detects orthopoxviruses, including all monkeypox viruses originating from the West African and Central African forms of the virus. The second kit is a specific test that detects monkeypox viruses only, while the third simultaneously tests for both orthopoxviruses and monkeypox viruses.

New law­suit ac­cus­es GSK of 'de­vice hop­ping' to block gener­ic in­haler com­pe­ti­tion

Despite inhalers being on the market for decades, many patients still can’t afford them. A new lawsuit filed in Missouri federal court puts the blame on GSK.

Last week, plaintiff Elliot Conrad Dale — who’s paid for GSK’s Ventolin and Arnuity Ellipta inhalers — filed a class-action lawsuit against the pharma giant, accusing it of scheming to block generic versions of its brand-name inhalers.