Novartis acquires Chinook Therapeutics to boost its drug development line-up

Novartis recently agreed to acquire Chinook Therapeutics, a Seattle-based biotech company. The acquisition will cost Novartis up to $3.5 billion, but the company decided that it will be worth it, as it plans to use it to boost its late-stage drug development line-up.

The idea is to use the new facility for developing a new treatment for a rare, and rather severe kidney disease. The transaction will be closed in the second half of this year, according to the Swiss drugmaker’s statement, and it will come in the form of a merger of Novartis’ newly-formed subsidiary and Chinook itself.

Novartis to acquire Chinook Therapeutics

The new deal comes with a number of benefits, including those for the Chinook shareholders. The deal is for them to receive $3.2 billion, or $40 per share, which will be paid in cash. On top of that, there will also be a contingent value right worth up to $300m. This will depend on several regulatory achievements, according to the company.

Vas Narasimhan, the CEO of Novartis, is quite eager to raise the prospect of blockbuster drugs of the future. However, focusing on new therapeutic areas is a major step toward that dream. Novartis already started heading down that path after leading a push to slash costs and reshape Swiss drug-making. Now, the company is focusing on fewer therapeutic areas, but in some of the most promising geographic markets.

Previously, Narasimhan said that he would consider a range of deal opportunities, focusing on assets worth less than $5 billion. Chinook believes that it can see a major readout in Q4 2023 of a clinical trial in the third and last stage of development. The company has been working on an oral drug candidate atrasentan to treat a tough kidney disease called IgAN.

Chinook Therapeutics is working on several major drugs

Besides that, Chinook Therapeutics is also developing another experimental treatment for the same disease, zigakibart. This is a treatment that is injected, and its Phase 3 trial should start at some point during Q3 2023.

Narasimhan already achieved a massive victory earlier in 2023, however, when his company announced a breast cancer drug called Kisquali. This is one of two new drugs that are crucial to the group’s sales growth. According to a study, the drug has been helpful with a wider patient group, giving many a lot of hope.

As for the other mentioned drug, it is called iptacopan, which is currently trialled against a genetic blood disorder. The disorder is quite rare, and the drug could maybe even challenge AstraZeneca’s drugs Ultomiris and Soliris.

Essentially, the Swiss pharma has seen major leaps recently, and it is expected to become more dependent on its own drug development fortunes. Furthermore, it intends to spin off a generic drug division Sandoz later this year.