Novartis inks $2.1B Endocyte buyout, furthering radiotherapy push

Novartis headquarters
If the deal closes, Novartis will have spent $6 billion on two radioligand therapeutic companies in about 12 months. (Wikimedia Commons/Andrew/Flickr)

Novartis has struck a $2.1 billion (€1.8 billion) deal to acquire Endocyte. The deal caps off a whirlwind year for Endocyte, which licensed the cancer drug that caught Novartis’ eye for $12 million just 12 months ago.

Endocyte was in the doldrums when it pinned its hopes of recovery from previous clinical setbacks on radioligand therapeutic 177Lu-PSMA-617. The radioconjugated PSMA antagonist had just shown promise in an open-label, single-arm prostate cancer trial, but its owner, ABX, was willing to let it go for $12 million upfront. That has proven to be a remarkably good deal.

Novartis, fresh from paying $3.9 billion for Advanced Accelerator Applications, identified Endocyte and 177Lu-PSMA-617 as the next pieces of its push into the radioligand therapeutic market. And, with Endocyte’s stock having risen over the past year, it is set to pay $2.1 billion to get the deal done. 

The takeover values Endocyte at $24 a share. At the company’s lowest ebb in the weeks before the ABX deal, Endocyte’s stock traded for as little as $1.17 a share. The ABX deal turned Endocyte from a flailing biotech into a rising company with a leading clinical-phase radioligand therapeutic, triggering a jump in its stock price that continued as it posted more phase 2 data and moved into phase 3.

Endocyte looked set to spend the next year or so working toward phase 3 data before Novartis stepped in. If the deal closes as expected, Novartis will have spent $6 billion on two radioligand therapeutic companies in about 12 months, and emerged from the spree with two of the leading prospects in the field.

Targeted radiotherapy has been around for decades without ever causing as much excitement as other classes of cancer drugs. Novartis clearly thinks the field has evolved, though. Notably, the drugs covered by its $6 billion spree use small molecules, not antibodies, to zero in on tumor cells. The use of small molecules could mean Novartis avoids the complications associated with antibody-based radiotherapeutics.