Novartis to Acquire Advanced Accelerator Applications for $3.9 Billion
As part of a move to strengthen its oncology portfolio, Novartis has signed a memorandum of understanding with Advanced Accelerator Applications (AAA), a Saint-Genis-Pouilly, France-headquartered radiopharmaceutical company, under which Novartis would acquire AAA for $3.9 billion subject to certain conditions.
AAA develops, produces, and commercializes molecular nuclear medicines, including Lutathera (177lu-dotatate), a regenerative laser-therapy product for treating neuroendocrine tumors. Radiopharmaceuticals, such as Lutathera, are medicinal formulations containing radioisotopes, which are used clinically for diagnosis and therapy, according to Novartis. AAA also develops, manufactures, and commercializes companion diagnostics for Lutathera (Netspot and SomaKit TOC). AAA had sales of EUR 109 million ($126 million) in 2016.
Lutathera was approved in Europe in September 2017 for treating unresectable or metastatic, progressive, well-differentiated (G1 and G2), somatostatin receptor-positive gastroenteropancreatic neuroendocrine tumors. Lutathera is under review by the US Food and Drug Adminstration with a review date of no later than January 26, 2018.
Under the memorandum of understanding, which has been approved by AAA’s board of directors, Novartis said it will make a cash offer of $41 per ordinary share of AAA and $82 per American Depositary Share (each representing two ordinary shares of AAA) subject to certain conditions. Novartis said it will commence a tender offer upon completion of works-council consultation and AAA’s Board of Directors recommending the tender offer to AAA shareholders. The senior management and Directors of AAA have, in their capacity as shareholders of AAA, undertaken to tender their shares into the proposed tender offer. The transaction is additionally subject to (1) the valid tender pursuant to the tender offer of ordinary shares (including ordinary shares in the form of American Depositary Shares) of AAA representing at least 80% of the outstanding ordinary shares on a fully diluted basis and (2) receipt of customary transactional regulatory approvals and other customary closing conditions.