Novartis Completes Acquisition of Chinook Therapeutics in Multi-Billion Dollar Deal

Chinook Therapeutics US16961L1061

The pharmaceutical landscape has shifted with Novartis AG finalizing its purchase of Chinook Therapeutics. The transaction, which closed on August 11, 2023, removes Chinook from public markets and integrates it as a wholly-owned subsidiary of the Swiss healthcare giant. Shareholders of the former independent company have now exchanged their equity for cash and potential future payments.

Central to this acquisition is the strategic expansion of Novartis's pipeline targeting serious chronic kidney diseases. The deal brings two late-stage clinical candidates for IgA nephropathy (IgAN) into Novartis's portfolio, aiming to accelerate their development and eventual global commercialization.

Novartis paid an upfront cash consideration of $3.2 billion to acquire Chinook. The agreement includes contingent value rights (CVRs) that could increase the total transaction value to a maximum of $3.5 billion, representing an additional $300 million in potential payouts.

The financial structure for shareholders is as follows:
* Immediate Cash Payment: $40.00 per share was distributed directly to stockholders.
* Contingent Value Right: Shareholders received one CVR for each share formerly held.
* Additional Potential: Each CVR offers the right to receive up to $4.00 more per share, contingent upon achieving specific regulatory milestones related to the lead asset.

Spotlight on Key Clinical Assets

The future value for former Chinook investors is now directly tied to the clinical progress of atrasentan, an oral endothelin A receptor antagonist. At the time of the acquisition, this drug was already in Phase III development. The payout of the CVR component is predicated on the successful navigation of regulatory hurdles, with Phase III clinical data serving as the critical determinant.

Also included in the acquisition is zigakibart, a subcutaneously administered monoclonal antibody likewise undergoing Phase III testing for IgAN. Novartis plans to leverage its worldwide resources and expertise to advance both therapeutic candidates through the final stages of development and toward market approval.

With the integration complete, Novartis gains a strengthened position in the nephrology therapeutic area, while former Chinook shareholders await the outcome of the clinical milestones that will trigger the contingent payments.

@ boerse-global.de | US16961L1061 NOVARTIS