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Novartis’ $9.7 Billion Deal Sets off Heart Drug Wars

November 25, 2019, 11:44 PM UTC

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Happy Monday, readers!

There’s a battle—or, at the very least, a whole lot of investor speculation—brewing in the heart drug space. (Granted, rampant speculation and rumor-mill-churning isn’t exactly rare in the biopharma world.)

The latest frenzy was set off by Swiss drug giant Novartis’ $9.7 billion deal to buy a medicines company aptly dubbed The Medicines Company over the weekend. The New Jersey biotech’s stock soared more than 25% Monday on the M&A news, which valued The Medicines Company at about a 24% premium over its Friday closing price.

The treatment driving the deal is The Medicine Company’s experimental inclisiran—a so-called “PCSK9” cholesterol-slashing drug in late-stage clinical studies.

There are already a few of these PCSK9 therapies on the market, including Amgen’s Repatha, as well as Sanofi and partner Regeneron’s Praluent. This class of drugs has slashed levels of “bad” cholesterol by 60% or more in trials.

But all of that efficacy hasn’t translated into the kinds of sales investors once hoped for. In fact, these existing PCSK9 drug manufacturers have had to offer rebates or cut list prices extensively to try and woo the market. After all, it’s difficult for high-priced new entrants to compete with cheaper treatments that have been available for decades.

And that’s part of the reason why the heart drug M&A gossip is now abound. If Novartis is willing to take a high-premium gamble on a drug class that’s had its share of struggles, could other companies in the heart health space fetch even greater valuations?

One firm at the heart of that gossip is Amarin. The company’s prescription-strength fish oil pill (some refreshers on that therapy here) won a key Food and Drug Administration (FDA) recommendation earlier this month that could significantly expand its market reach.

Vascepa has been available since 2012, but only approved for certain patients with a particularly high level of fats called triglycerides which are also linked to heart disease. A label expansion for patients with lower levels of the lipids, but still at risk for heart disease, could prove a boon to Amarin’s sales following studies suggesting it could cut the risk of serious cardiac events like heart attacks. The full agency’s decision is expected before the end of the year.

Who might snatch up Amarin? Could it be a rival that wants to widen its heart health footprint—perhaps even PCSK9 drug makers such as Amgen? And if there is an M&A on the horizon (if Vascepa does, in fact, win its label expansion), could it fetch an even greater premium than what Novartis paid for The Medicines Company?

Or might Amarin choose to go it alone entirely? We’ll find out soon enough.

Read on for the day’s news.

Sy Mukherjee


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