Novartis Secures $3.2 Billion Acquisition of Chinook to Enhance Kidney Disease Strategy

Novartis, the Swiss pharmaceutical giant, is set to bolster its kidney disease pipeline through the acquisition of Chinook Therapeutics for an impressive $3.2 billion. This strategic move aims to strengthen Novartis’ position in the realm of rare, progressive chronic kidney diseases while expanding its range of treatment options.

Chinook Therapeutics has accepted Novartis’ buyout offer, which includes an upfront payment of $3.2 billion, with the potential for an additional $300 million contingent upon meeting specific regulatory milestones. The upfront amount values Chinook at $40 per share, representing a remarkable 67% premium over its closing price on Friday. This offer is particularly appealing considering that Chinook’s share price has never come close to $40 since its public debut in 2020 through a reverse merger with Aduro Biotech.

Novartis’ acquisition of Chinook is driven by the opportunity to gain control over two late-stage programs targeting a rare kidney disease. Atrasentan, an oral antagonist of the endothelin A receptor, is the most advanced asset among these programs. In 2019, Chinook acquired atrasentan from AbbVie in a deal valued at up to $135 million in milestones.

Initially, AbbVie had launched a phase 3 clinical trial for chronic kidney disease using atrasentan in 2013. However, they prematurely terminated the study after discontinuing their involvement in the therapeutic field and observing outcomes that were lower than expected. Recognizing the potential of atrasentan, Chinook speculated that blocking the endothelin receptor could enhance outcomes in high-risk patients. This hypothesis was based on evidence suggesting the activation of the endothelin system plays a role in the progression of IgA nephropathy.  Novartis aims to seize this opportunity before Chinook’s ongoing phase 3 trial concludes, with data expected in the fourth quarter.

Alongside atrasentan, Chinook is advancing a second late-stage candidate known as zigakibart, or BION-1301. Zigakibart, an anti-APRIL monoclonal antibody, has been developed to specifically bind to the extracellular protein APRIL. This protein is found at higher levels in individuals with IgA nephropathy and is associated with a negative prognosis. Encouraging evidence suggests that zigakibart can reduce mechanistic biomarkers and proteinuria within three months of treatment initiation. Chinook plans to commence a phase 3 trial for zigakibart later this year, further enhancing its potential as a valuable asset for Novartis.

While Novartis aims to expand its renal drug portfolio, it faces competition from other industry players such as Calliditas Therapeutics and Travere Therapeutics, which have already introduced treatments like Tarpeyo and a dual ARB/endothelin receptor antagonist to the market. However, Novartis remains committed to challenging these competitors with its ongoing phase 3 trial of iptacopan in IgA nephropathy.

Novartis’ decision to delve deeper into IgA nephropathy follows a strategic review in which the company discontinued 10% of its pipeline programs, concentrating efforts on five key therapeutic areas: cardiovascular, hematology, solid tumors, immunology, and neuroscience. The acquisition of Chinook aligns perfectly with this strategic direction, enabling Novartis to significantly expand its renal portfolio and complement its existing pipeline with innovative medicines.

By incorporating Chinook’s assets, Novartis aims to address the challenges presented by IgA nephropathy and provide novel and innovative treatment options to patients afflicted by this debilitating kidney disease. Novartis CEO Vas Narasimhan recognizes the importance of the acquisition, describing it as a unique opportunity to confront one of society’s most formidable healthcare issues and make a substantial impact on patient care.

With its significant investment in Chinook Therapeutics, Novartis is poised to accelerate the development of potentially groundbreaking treatments for kidney diseases. The acquisition not only reinforces Novartis’ commitment to advancing healthcare but also demonstrates the company’s dedication to improving the lives of patients affected by chronic kidney diseases.

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