Novartis has entered into an agreement to acquire Chinook Therapeutics for approximately $3.5bn, marking a notable expansion to the Swiss drugmaker’s renal pipeline.
The deal grants Novartis access to the US biopharma’s two late-stage candidates in development for Immunoglobulin A Nephropathy (IgAN), a rare and progressive kidney disease that mostly affects young adults.
IgAN, which Novartis says currently lacks targeted treatment options, affects up to 21 people per million per year in the US, with a higher rate among Asian populations.
The most advanced of the two assets is atrasentan, an oral endothelin A receptor antagonist that Chinook bought from AbbVie at the beginning of 2020. The candidate is currently in phase 3 development for IgAN, with a readout from the study expected in the fourth quarter of this year.
The second candidate, zigakibart (BION-1301), is a subcutaneously administered anti-APRIL monoclonal antibody that is expected to enter phase 3 development in the third quarter.
Vas Narasimhan, chief executive officer of Novartis, said: “IgAN is a devastating disease mostly affecting young adults and potentially leading to dialysis or kidney transplantation.
“We are excited by this unique opportunity to address one of society’s most challenging healthcare issues, with the potential to bring additional much-needed treatment options to patients.”
The transaction has been unanimously approved by the boards of both companies and is expected to close in the second half of this year.
Under the terms of the agreement, Chinook shareholders will receive $3.2bn, or $40 per share in cash, representing a premium of 66.7% to the company’s closing price last week.
Shareholders will also receive a contingent value right worth up to $300m, depending on certain regulatory milestones, Novartis said.
Eric Dobmeier, president and chief executive officer of Chinook, said: “We believe this transaction is great news for kidney disease patients and the programmes we have built at Chinook.
“Through this merger, Novartis can apply its substantial resources to pursue broader development efforts and commercialisation of atrasentan, zigakibart and other programmes in our pipeline to build its global renal therapeutic area.”