The Swiss pharmaceutical company Novartis has reported that it will acquire the American drug manufacturer AveXis, which conducts clinical research for the treatment of spinal muscular atrophy, for $8.7 billion, according to Reuters.
Novartis CEO Vas Narasimhan emphasized that the acquisition will change the way this disease is treated and accelerate the company’s strategy focused on highly effective drugs, as well as strengthen its leadership position in neuroscience.
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Recently, Novartis announced that it will sell its stake in a joint consumer healthcare company to partner GlaxoSmithKline for $13 billion, which will allow them to enhance their focus on core business development.
Although the acquisition will weaken operational income in 2018 and 2019 due to research and development costs, Narasimhan expects strong profit and earnings, as well as accelerated sales by 2020.
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He believes that the drug for spinal muscular atrophy has sales potential worth several billion dollars and that they conducted thorough due diligence on the candidate before making the acquisition decision.
The transaction is expected to close mid-year. Last year, Novartis achieved a net profit of $7.7 billion thanks to strong sales of two key drugs, while revenues amounted to $49.1 billion.
