Novartis said to be shying away from Cytokinetics deal

11 Jan 2024
firstwordpharma.com
Phase 3Clinical ResultAcquisition
Days after the rumour mill had Novartis nearing a possible deal for Cytokinetics, a report Thursday in The Wall Street Journal says the Swiss drugmaker's interest appears to have waned. Citing unnamed sources, the report said Novartis, which had been pursuing Cytokinetics for several months, backed away "sometime in the past day or two."
Talks that a potential takeover was in the works first emerged in November, and picked up steam a few weeks later with speculation that both Novartis and AstraZeneca were considering bids for the company.
Cytokinetics closed out 2023 by unveiling positive top-line results from the Phase III SEQUOIA-HCM study showing that its experimental heart drug aficamten significantly improved exercise capacity in patients with symptomatic obstructive hypertrophic cardiomyopathy. Truist analysts forecast that the cardiac myosin inhibitorcardiac myosin inhibitor could generate up to $3.6 billion in sales by 2032.
Shares of Cytokinetics – with a market capitalisation of about $10 billion, as of Wednesday's close – have more than doubled since reports of takeover interest in the company first surfaced. The stock gained 15% this past Monday when WSJ reported that it was in advanced talks with Novartis, although shares have been falling as days passed without an official announcement.
On Thursday, Cytokinetics was down 16% on news that Novartis was shying away from a deal, paring back its market value to $8.3 billion. During Cytokinetics’ early morning presentation at the JP Morgan healthcare conference on Monday, CEO Robert Blum was adamant about not wanting to answer business development-related questions. And at the Swiss drugmaker's presentation this week, CEO Vas Narasimhan suggested that the company is primarily interested in smaller ‘bolt on’ acquisitions.
Novartis faces declining revenue later this decade with several products facing the loss of patent protection, including its heart-failure drug Entresto (sacubitril/valsartan), which had sales of $4.6 billion in 2022, and aficamten was viewed as a possible compliment to its cholesterol treatment Leqvio (inclisiran). However, Novartis shares have been rising lately on the back of a positive readout for its CDK4/6 inhibitor Kisqali (ribociclib) in breast cancer and the rollout of radiotherapy Pluvicto (lutetium 177 vipivotide tetraxetan) for prostate cancer.
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