Switzerland’s Novartis this morning said it is snapping up UK biotechnology company NeuTec – which specialises in anti-infectives for use in the secondary care setting and has one late-stage product sitting with European regulators – for a cool £305 million ($569 million).
The board of the UK firm has unanimously recommended the all-cash offer, perhaps not surprisingly since shareholders will take home £10.50 per share, around the price it was trading at on the London Stock Exchange this morning, but a 109% premium to the June 5 figure. The previous year high was just £5.45, although NeuTec’s Tuesday announcement that it was in takeover discussions quickly pushed the share price up past the £9.00 mark.
The acquisition marks a growing trend for companies to look to the secondary care arena for drug development, and marks a significant leg-up for Novartis in hospital anti-infectives. NeuTec’s lead drug, Mycograb, is a so-called genetically recombinant antibody fragment that binds to heat shock protein 90 and prevents the fungus concerned from mounting a defence against commonly-used antifungals such as amphotericin B. It has been shown in clinical trials to significantly cut mortality in patients with invasive candidiasis – a severe fungal infection – when used in combination with amphotericin B (4% versus 18%) and also dramatically improved clinical outcomes compared to the conventionally-used medicine alone.
Mycograb was filed with the European regulatory authorities in March last year, with a US submission anticipated in 2009, and has garnered orphan drug status against invasive fungal infections, which could see it having market exclusivity for a 10-year period following launch. Meanwhile, coming up behind it is Autograb, an antibody fragment to be used with antibacterials for the treatment of Staphylococcus aureus infections, including the notoriously difficult-to-treat methicillin-resistant Staphylococcus aureus. Submissions for this drug are planned for 2010.
These particular segments of the anti-infectives market pulled in $1.7 billion and $1.5 billion respectively last year in the world’s top seven pharmaceutical markets. Novartis is clearly keen to strike while the iron’s hot: as the population ages, more surgical procedures are carried out and more people use chemotherapy, the patient population expands. In addition, there is the perennial problem of antibiotic resistance, which also escalates the need for new therapies.
Last year, Novartis’ acquisition of Chiron brought Cubicin (daptomycin) into the pot – the first in a new class of antibiotics called cyclic lipopeptides, for use in skin and soft-tissue infections – while a deal with Arrow Therapeutics in June 2005 also saw the small molecule A60444 for the treatment of respiratory syncytial virus join Novartis’ burgeoning pipeline in this field.