Swiss drugmaker Novartis is nearing a $7 billion deal to acquire The Medicines Company. The acquisition is likely to strengthen the Swiss pharmaceutical giant's position in the durgmaking industry as a key player in heart-failure treatment related medicines.
Per the deal, Novartis has agreed to pay The Medicines Company $85 per share. At $85 per share the U.S cholesterol drugmaker would value $9.1 billion, according to Wall Street Journal. The Medicines Company was exploring sale lately. Novartis too has been trying to reshape itself and its portfolio for quite some time now.
Big move by Novartis
The Swiss drugmaker has a market value of $203 billion and has been trying to break inroads into the heart-failure treatment category in a big way. The company has lately been trying to push the sales of its new drug Entresto that is used to tackle heart failure. However, the initial sales are yet to meet the expectations of analysts.
Understandably, Novartis with the acquisition of The Medicines Company will now try to add muscle to its all-important heart-failure treatment category. Novartis too has been trying to look for an acquisition lately and The Medicines Company's buyout comes just in time.
Novartis tries to bounce back
Novartis under the leadership of its chief executive officer Vas Narasimhan has been trying to rearrange it portfolio, with special focus on heart treatments, for a while now.
Novartis has always been one of the key players in the heart ailment drug category and is once again trying to regain its lost glory. The company also has lately been into a number of acquisitions and disposals to reshape itself.
An attempt to rebuild its portfolio
The Swiss pharmaceutical giant was one of the frontline cardiovascular drug franchisees globally but slowly started losing ground after its highest selling heart-failure drug, Diovan, which used to generate revenues of $6 billion annually for the company lost its patent protecting 2012.
Since then the company has been trying to find an alternative. Entresto, a $1 billion seller for heart failure, has been Novartis' biggest move in recent times but is far away from reaching the demand and popularity of Diovan.
On the other hand, The Medicines Company's has been specializing in cholesterol-lowering drug inclisiran for heart patient. The acquisition might just prove to be the right move for Novartis and aid in rebuilding its portfolio.