Broadening Novartis’ NET

Where Advanced Accelerator’s Lutathera fits into Novartis’ NET franchise

Novartis AG’s proposed acquisition of Advanced Accelerator Applications S.A. would broaden the pharma’s neuroendocrine tumor franchise by providing it with a second-line agent -- Lutathera -- that addresses patients with progressive, symptomatic disease.

On Oct. 30, Novartis offered to acquire Advanced Accelerator for $82 per ADS in a deal that values the company at $3.9 billion. The price is a 39% premium on its close of $59.76 on Sept. 27, before media reports said the two companies had entered M&A discussions.

The deal fits squarely within Novartis’ search for $2-$5 billion bolt-on acquisitions that could help the pharma fill the revenue gap created when cancer drug Gleevec imatinib went off patent in February 2016, flagging sales from its Alcon Inc. eye care business and slow uptake for heart failure drug Entresto sacubitril/valsartan.

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