Novartis tight-lipped on MedCo buyout rumors

Novartis CEO Vas Narasimhan 2019
Novartis CEO Vas Narasimhan (Novartis)

The Medicines Company, fresh from its turn at the American Heart Association's (AHA's) Scientific Sessions this weekend, has seen its shares jump on growing rumors that Swiss major Novartis may be interested in buying it out.

The biotech, which is developing experimental drugs to find new ways of tackling cardiovascular disease, is said to be in the crosshairs of Novartis, Bloomberg reported, citing people “familiar with the matter.”

MedCo has a market cap of $4.7 billion, with its shares jumping since the summer after its siRNA therapy inclisiran showed back in September a clean safety profile and that it is as effective as incumbent drugs sold by Amgen, Regeneron and Sanofi. It’s hoping for approval next year but will likely need help with commercialization.

Novartis is not commenting on the rumors.

Over the weekend at AHA, MedCo posted more late-phase data linking inclisiran to steep declines in LDL cholesterol. Inclisiran achieved a placebo-adjusted drop in LDL cholesterol of 58%, although it failed to drive the positive changes in cardiovascular outcomes seen in an earlier study.

Despite this, the data were generally taken as a positive as the results validate the LDL-C improvements seen in the early study by linking inclisiran to another 50%-plus reduction in the lipoprotein. The safety profile, a potential concern for the siRNA drug, again came in clean, and it’s hoped to be a better, cheaper version than rival drugs on the market.

A deal for the biotech would add to Novartis' work (and sales force) on its on heart drug Entresto, which has been billed as a fairly major blockbuster but suffered a recent trial setback, hurting its prospects and just maybe making Novartis think externally to help shore up its CV franchise.

Shares in MedCo jumped 27% on the rumors on Tuesday morning, after ending the day up 12% Monday.