Swiss drugmaker Novartis AG has entered into a licensing deal worth up to $1.01 billion with Arvinas. According to a report by news agency Reuters, the deal has been signed to gain access to the U.S. biotech firm’s experimental prostate cancer drug.
Under the agreement, Novartis has acquired global rights to develop and commercialize the drug, ARV-766, for an upfront payment of $150 million. Arvinas is also eligible to get tiered royalties for the drug and potential milestone payments adding up to $1.01 billion.
ARV-766 is designed to target and degrade androgen receptors, which bind to male sex hormones or androgens.
Arvinas is developing treatments that harness the body’s own natural protein disposal system to degrade and remove disease-causing proteins.
On Thursday, the swiss drugmaker also announced that it has launched a tender offer to acquire MorphoSys , a German developer of cancer treatments, for an aggregate 2.7 billion euros ($2.9 billion).
Reuters reported in February that Swiss drugmaker Novartis would buy MorphoSys, which had an equity market value of around 1.6 billion euros before the offer was announced.
The Swiss drugmaker said its cash offer price of 68 euros per MorphoSys share corresponds to a premium of 142 percent on the volume-weighted average price during the last three months, as of the unaffected closing price on Jan. 25. MorphoSys shares closed at 67.1 euros on April 10.
Novartis, which said the acceptance period begins on Thursday and will end at midnight on May 13, will take MorphoSys private after the deal, which is contingent on certain conditions, including a minimum acceptance threshold of 65 percent.
MorphoSys, which is headquartered in Planegg, Germany, develops drugs to fight deadly forms of cancers such as myelofibrosis, which is a rare type of bone marrow cancer, and certain types of knotty lymphomas.
Novartis has been cutting jobs and costs, and spun off its generic drugs business Sandoz last year, part of a focus on fewer therapeutic areas and geographic markets.
It has said its overall mergers and acquisitions strategy was focused on deals worth less than $5 billion.
Novartis said Deutsche Bank is acting as share tender agent and Bank of New York Mellon will serve as American Depository Shares (ADS) tender agent for the offer.
