Novartis shares are higher Thursday, as the Swiss drug maker has shared its plans to purchase US cancer drug specialist, Endocyte, for $24 per share. The move comes as the pharma giant continues to pursue a more focused and profitable, path.
By 1410 BST, Novartis shares were 1.83% higher at CHF85.82. The stock has been broadly higher in recent weeks.
Novartis to buy Endocyte
Novartis announced plans to purchase US cancer drug specialist, Endocyte, earlier Thursday. The move, which values the US pharma firm at $2.1 billion, will support Novartis’ plans to pursue the development of more new drugs, as it seeks to improve profitability.
Endocyte’s knowledge and abilities will help Novartis in its development of a drug that can be used earlier in the treatment of prostate cancer.
“Today's announcement about the proposed acquisition of Endocyte builds on our growing capability in radiopharmaceuticals, which is expected to be an increasingly important treatment option for patients and a key growth driver for our business,” said Liz Barrett, CEO of Novartis Oncology.
“We are also excited about the opportunity to break into the prostate cancer arena with a near-term product that has the potential to make a meaningful impact for patients in great need of more options,” Barrett added.
The purchase of Endocyte will be an all cash transaction and once the deal closes, Endocyte will become part of Novartis, under a newly formed subsidiary.
Novartis Q3 earnings
Novartis also reported its third-quarter earnings Thursday, which showed net group sales grew 6% to CHF12.8 billion in Q3 2018, from CHF12.4 billion a year earlier.
In addition, the Swiss drug maker has raised its 2018 guidance.
“Net sales revised upwards, expected to grow mid-single digit (cc); core operating income guidance confirmed, expected to grow mid to high-single digit (cc),” Novartis said in its earnings release.