Novartis Acquires AveXis in $8.7 Billion Gene Therapy Deal

Hot on the heels of selling its stake in a shared consumer health business to GSK for $13 billion, Novartis has used the funds to acquire gene therapy biotech AveXis. The $8.7 billion deal values AveXis’ shares at $218 apiece and will give Novartis access to the company’s gene replacement therapy for spinal muscular atrophy (SMA), AVXS-101.

“The proposed acquisition of AveXis offers an extraordinary opportunity to transform the care of SMA,” said Vas Narasimhan, CEO of Novartis. “We believe AVXS-101 could create a lifetime of possibilities for the children and families impacted by this devastating condition. The acquisition would also accelerate our strategy to pursue high-efficacy, first-in-class therapies and broaden our leadership in neuroscience. We would gain with the team at AveXis another gene therapy platform, in addition to our CAR-T platform for cancer, to advance a growing pipeline of gene therapies across therapeutic areas.”

SMA is a neurodegenerative disease which affects one in every 6,000 to 10,000 children born. The rare disease is the result of a mutation in the survival motor neuron (SMN1) which causes the death of motor neurons and progressive muscle weakness, and there are three to five known types of the disease depending upon the age of onset of symptoms.

SMA Type 1 is the most severe form of the disease which is usually diagnosed within the first six months of an infant’s life. Ninety percent of children diagnosed with SMA Type 1 are ventilator-dependent and have a life expectancy of less than two years.

AveXis’ research and development has largely been in the treatment of SMA Type 1, with early-stage clinical trials meeting functional and survival-based outcomes. As a result of this success, AveXis has been granted Orphan Drug designation and Breakthrough Therapy designation for AVXS-101 by the US Food and Drug Administration (FDA).

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“Bringing AveXis on board would support both our ambition to be a leader in neurodegenerative diseases and our Neuroscience franchise priorities to strengthen our position in devastating pediatric neurological diseases such as SMA,” said Paul Hudson, CEO Novartis Pharmaceuticals. “We relish the opportunity to leverage our expertise, our 70-plus year heritage in neuroscience and our global footprint to help AVXS-101 benefit high-need SMA patients around the world.”

Currently, the only available therapy for the treatment SMA is Biogen’s Spinraza, which was approved by the FDA in early 2017. But unlike AVXS-101, Spinraza (nusinersin) is a long-term therapy which has the potential to cost as much as $750,000 for the first year of treatment.

According to Novartis, the company plans to submit a Biologics License Application (BLA) to the FDA’s Center for Biologics Evaluation and Research (CBER) in late 2018 with expected approval in 2019. Since AVXS-101 is a gene replacement therapy which would only need to administered once to effectively “cure” SMA, it’s likely the biologic would come with a hefty price tag that reflects this ability.

Novartis’ acquisition of AveXis will also provide the Swiss pharmaceutical company with access to other pipeline products for rare diseases such as Rhett Syndrome (RTT) and amyotrophic lateral sclerosis (ALS). These gene therapies, including AVXS-101, are delivered using AveXis’ proprietary adeno-associated virus (AAV9) capsid technology which is capable of crossing the blood-brain barrier and targeting motor neuron cells.

“The commitment, drive and expertise of the entire AveXis team has created significant stockholder value, and we are pleased that Novartis recognizes that value in the potential of AVXS-101, our first in class manufacturing capabilities and our gene therapy pipeline, all of which serve to transform the lives of people devastated by rare and life threatening neurological diseases such as SMA, Rett syndrome and genetic ALS,” said Sean Nolan, President and Chief Executive Officer of AveXis. “With worldwide reach and extensive resources, Novartis should expedite our shared vision of bringing gene therapy to these patient communities across the globe as quickly and safely as possible.”