Swiss pharmaceutical giant Novartis has announced its acquisition of Chinook Therapeutics, a biotech firm based in the United States, for up to $3.5 billion. The move is aimed at bolstering Novartis' late-stage drug development portfolio and comes amid the ongoing race to develop an effective treatment for an uncommon kidney disease. Under the terms of the agreement, Chinook shareholders will receive $3.2 billion in cash plus a contingent value right worth up to $300 million, depending on the attainment of certain regulatory milestones.
The drug developed by Chinook is aimed at treating IgA Nephropathy, or IgAN, a rare disease that leads to kidney failure in young adults. Novartis is already developing another drug candidate for the same condition. The IgAN market has attracted a number of players, including Roche, Vera Therapeutics, Ionis, Omeros, and HI-Bio, among others.
Novartis has been working to refocus its business and slash costs while concentrating on its most promising geographic markets and therapeutic areas. The acquisition of Chinook by Novartis underscores the Swiss firm's eagerness to build a strong pipeline of blockbuster drugs and sends a clear signal that the company is prepared to spend heavily to achieve that goal.
Novartis CEO Vas Narasimhan has previously stated that his company would focus primarily on deal targets worth $5 billion or less. The acquisition of Chinook appears to align well with that mandate.
The transaction is expected to close in the second half of 2023, according to Novartis. Chinook, for its part, expects to see a pivotal readout of a clinical trial in the fourth quarter of 2021 of an oral drug candidate called atrasentan, which is in the third and final stage of development and is aimed at treating IgAN. Chinook is also working on another candidate, zigakibart, that is injected, and plans to begin a Phase 3 trial in the third quarter of 2023.
IgAN is an autoimmune disease that mainly affects young adults, leading to kidney failure that requires organ transplantation or dialysis. Novartis notes that no targeted treatments for the malady currently exist. In the United States, IgAN affects up to 21 people per million per year, with a higher incidence rate among Asian populations. It is also the leading cause of kidney failure in young adults of Caucasian origin.
Novartis' acquisition of Chinook underscores the importance of developing blockbuster drugs for rare diseases, particularly given the company's decision to spin off its generic drugs division Sandoz in the second half of 2023.