Novartis confirms $9.7bn takeover of The Medicines Company

MedCo is a company that has produced an inhibitor that lowers cholesterol by blocking the synthesis of PCSK9 in the liver rather than targeting the protein itself. It acts via a mechanism that can be given as a subcutaneous injection initially and then again at three months and every six months thereafter

MedCo’s Inclisiran is seen as a serious competitor and disrupter to the market, particularity Amgen’s Repatha and Sanofi/Regeneron’s Praluent. Especially in the sense that Inclisiran has the benefit of a twice-yearly dosing schedule and data demonstrating it can reduce cholesterol even in patients on maximum does of statins. While Repatha and Praluent are dosed much more frequently either monthly/bi-monthly.

Novartis has obviously seen the promise in MedCo and has agreed to pay $9.7bn for the company, which amounts to $85 per share. Novartis is betting on the growth potential of inclisiran, where analysts have suggested it has blockbuster potential if approved for a wide patient population.
Repatha and Praluent have been struggling this year with payer resistance stinting growth. The respective developers have sinced offered discounts ranging from $14,000 per year to $6,000. This presents interesting food for thought for Novartis as it considers the price it will be on offer for inclisiran if approved.

According to Bloomberg, analysts have responded well to this announcement as Inclisitan fits very well into its current cardiovascular portfolio along with Entresto. Inclisirans planned approval is set to be completed before the end of the year in US and in Europe for the first quarter of 2020. If this all goes to plan, Novartis expects inclisirian to start to contribute to group sales from 2021.

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