Novartis to Acquire The Medicines Company for $9.7 Billion to Expand Cardiovascular Portfolio

VCBeat (WeChat ID: vcbeat) learned from Business Wire that on November 24, 2019, Novartis AG announced it had reached an agreement to acquire The Medicines Company in an all-cash transaction at $85 per share, for a total of $9.7 billion.

Reportedly, this price represents a premium of approximately 45% over Madison’s closing price of $58.65 on November 18, 2019 (the last trading price before news reports emerged regarding a potential transaction between Madison and Novartis). The transaction received unanimous approval from the boards of directors of both companies.

In this transaction, Goldman Sachs & Co. and JP Morgan Securities LLC served as Madison’s financial advisors, while Paul, Weiss, Rifkind, Wharton & Garrison LLP served as Madison’s legal counsel.

The transaction is expected to be completed in the first quarter of 2020. Until then, Madison will continue to operate as an independent company. The company expects to submit regulatory applications for inclisiran in the United States in the fourth quarter of 2019 and in Europe in the first quarter of 2020.

Founded in 1996 and headquartered in Parsippany, New Jersey, USA, Madison is a biopharmaceutical company. The company focuses on addressing the greatest global healthcare challenges and burdens—cardiovascular diseases. Its goal is to halt the fatal progression of atherosclerosis and reduce cardiovascular risk caused by high levels of LDL-C (low-density lipoprotein cholesterol), also known as "bad" cholesterol.

Inclisiran is the first and only cholesterol-lowering therapy in the small interfering RNA (siRNA) class. It is a therapy developed by The Medicines Company in Phase 3 clinical studies to evaluate its ability to lower low-density lipoprotein cholesterol (LDL-C). As an siRNA, inclisiran leverages the body’s natural RNA interference process to inhibit the production of the PCSK9 protein in the liver, thereby enhancing the liver’s capacity to remove LDL-C from the bloodstream and reducing LDL-C levels. In Phase 3 studies, when administered alongside statins on a twice-yearly dosing schedule, inclisiran reduced LDL-C by 58% and achieved a time-adjusted sustained reduction of 56% in persistent LDL-C. Inclisiran has not yet been approved by the FDA or any other regulatory authority. Under a licensing and collaboration agreement with Alnylam Pharmaceuticals, The Medicines Company obtained global rights to develop, manufacture, and commercialize inclisiran.

Mark Timney, CEO of The Medicines Company, stated, “Our company’s unwavering persistence, focus, and the steadfast efforts of our employees have enabled us to unlock the intrinsic value of inclisiran for patients and create maximum value for shareholders. We are delighted to see millions of patients with atherosclerotic cardiovascular disease and familial hypercholesterolemia benefiting from this transformative therapy.”

Dr. Alexander J. Denner, Chairman of the Board of Madison, stated, “This $9.7 billion transaction represents a tremendous outcome for Madison’s shareholders. Not long ago, Madison stood at a crossroads after losing its primary revenue source. I am proud that the company’s restructured Board has transformed into a lean, highly focused team that successfully advanced an exciting new therapy, creating substantial value for both patients and shareholders.”

Dr. Denner continued, “Our vision for inclisiran is an affordable, widely accessible therapy that will significantly reduce the medical and economic burden on patients with cardiovascular disease. Given the substantial capital required to fully realize its potential, we have decided to sell it to a company with greater resources and scale than ours. On behalf of the Board of Directors, I would like to thank our outstanding management team and talented employees for their tireless efforts and dedication. I also extend my gratitude to our partner, Alnylam, whose gracious support was invaluable in closing this transaction.”

Novartis AG, established in 1996 through the merger of two Basel-based chemical and pharmaceutical companies, Ciba-Geigy and Sandoz, is a multinational pharmaceutical and biotechnology company headquartered in Basel, Switzerland. Its core business spans various sectors, including patented medicines, consumer health, generic drugs, eye care, and animal health. The company’s Innovative Medicines division provides patented prescription drugs aimed at improving health outcomes for patients and healthcare providers. This division also commercializes products in the areas of oncology and rare diseases, ophthalmology, immunology and dermatology, neuroscience, respiratory, cardiometabolic, and established medicines.

(Compiled by Wang Fang)