Novartis’ $9.7 billion acquisition of The Medicines Company, which the companies announced Sunday after days of rumors, is a story of second acts.
- The giant pharmaceutical company Novartis struck a $9.7 billion deal on Sunday to acquire The Medicines Company.
- The Medicines Company makes a type of cholesterol-lowering drug that was once predicted to generate many billions of dollars in annual sales, but has so far disappointed drug makers and investors.
- “We’re hoping to reimagine treatment of the leading global cause of death,” Novartis CEO Vas Narasimhan tweeted after the deal was announced.
- The success of the deal will depend on sales of the drug, known as inclisiran.
It represents a new chance for a type of cholesterol-lowering drug that was once predicted to generate many billions of dollars in annual sales, but has so far disappointed drug makers and investors, to dominate the landscape for heart medicines.
It’s also a triumphant final act for Clive Meanwell, who founded The Medicines Company in 1996 and ran it through a quarter-century rollercoaster ride that saw the firm become a Wall Street darling, fall from favor, and, in the past year, reach new highs. And it’s a second act for The Medicines Company’s current CEO, who previously spent almost four years as the chief executive of Purdue Pharma, the company whose name has become synonymous with the opioid epidemic.
The deal is a big victory for top executives at The Medicines Company
The deal also represents another victory for Alexander Denner of Sarissa Capital, who took control of The Medicines Company’s board last March and is chairman of the company’s board of directors.
“Not so long ago, The Medicines Company was at a crossroads due to the loss of its key revenue driver,” Denner said in a press release. “I am proud of the company’s transformation under a reconstituted board into a lean, highly focused team successfully advancing an exciting new therapy and creating tremendous value for patients and shareholders.”
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The Medicines Company’s rise, fall, and subsequent rise also tells the story of how the industry has shied away from heart drugs, which a little more than a decade ago were the biggest sellers among all medicines, even as the heart disease remains the biggest global killer.
“We’re hoping to reimagine treatment of the leading global cause of death,” Novartis CEO Vas Narasimhan tweeted after the deal was announced. “This could be a strong step forward in @Novartis’s transformation into a focused medicines company.”
Acquiring The Medicines Company fulfills Narasimhan’s goal of finding outside deals to bolster Novartis’ growth. Novartis has previously pulled off a turnaround of a heart failure drug, Entresto, that initially looked like a flop, and it will be able to use the same sales force to sell The Medicines Company’s drug, inclisiran.
Source: Business Insider