Novartis to expand expertise in radiopharmaceuticals with Endocyte buy

Swiss pharma giant Novartis (NOVN: VX) today announced that it has entered into an agreement and plan of merger with Endocyte (Nasdaq: ECYT), a US-based biopharmaceutical company focused on developing targeted therapeutics for cancer treatment.

Under the terms of the agreement, Novartis would acquire all outstanding shares of Endocyte common stock for $24 per share, valuing Endocyte's equity at $2.1 billion. News of the proposal sent Endocyte’s shares rocketing 49.74% to $23.30 in pre-market trading, while Novartis edged up 1.16% to 85.26 Swiss francs, though that was more likely a result of strong financials which were also released today.

This is the second acquisition to be announced by Novartis’ chief executive Vas Narasimhan, since he took over the CEO post in February. Novartis could make further deals which strengthened its capabilities in cell, gene and radio therapies. Novartis was "always looking for those kind of bolt on opportunities," he told journalists today. Mr Narasimhan has also announced plans to spin out the Alcon eye care unit, which could be worth some $25 million, and sold its stake in the consumer joint venture with GlaxoSmithKline to GSK for around $13 million. In April, Novartis announced it would pay $8.7 billion to acquire AveXis, a US specialist in spinal muscular atrophy.