Novartis to buy US gene therapy company AveXis for $8.7bn

Swiss drug maker Novartis has agreed to buy US-based clinical stage gene therapy company AveXis for $8.7bn in cash, or $218 per share.

AveXis said the deal price represents a premium of 88% to its closing price on Friday and a 72% premium to the company's 30-day volume-weighted average stock price.

The transaction, which has been unanimously approved by the boards of both companies, is expected to close in mid-2018.

Nasdaq-listed AveXis has several ongoing clinical studies for the treatment of SMA, an inherited neurodegenerative disease caused by a defect in a single gene, the survival motor neuron (SMN1). Novartis said the lead AveXis gene therapy candidate, AVXS-101, has "highly compelling" clinical data in treating SMA Type 1, which is the number one genetic cause of death in infants, where nine out of 10 infants do not live to their second birthday or are permanently ventilator dependent.

Novartis chief executive officer Vas Narasimhan said: "The proposed acquisition of AveXis offers an extraordinary opportunity to transform the care of SMA. We believe AVXS-101 could create a lifetime of possibilities for the children and families impacted by this devastating condition. The acquisition would also accelerate our strategy to pursue high-efficacy, first-in-class therapies and broaden our leadership in neuroscience.

"We would gain with the team at AveXis another gene therapy platform, in addition to our CAR-T platform for cancer, to advance a growing pipeline of gene therapies across therapeutic areas. We look forward on the closing of the deal to a smooth transition for AveXis employees and welcoming them to Novartis."

Sean Nolan, president and CEO of AveXis, said: "The commitment, drive and expertise of the entire AveXis team has created significant stockholder value, and we are pleased that Novartis recognizes that value in the potential of AVXS-101, our first in class manufacturing capabilities and our gene therapy pipeline, all of which serve to transform the lives of people devastated by rare and life threatening neurological diseases such as SMA, Rett syndrome and genetic ALS.

"With worldwide reach and extensive resources, Novartis should expedite our shared vision of bringing gene therapy to these patient communities across the globe as quickly and safely as possible."