Novartis on track to buy drug developer Cytokinetics, insider says

Swiss drugmaker Novartis is in the lead to acquire Cytokinetics in a deal that could value the drug developer at well more than $10bn, a source familiar with the matter said on Monday.

Novartis is poised to prevail in the auction for Cytokinetics, ahead of other bidders that include AstraZeneca and Johnson & Johnson, according to the source.

A deal could be announced as early as this week, the source said, helping Novartis gain access to Cytokinetics’ experimental treatment, aficamten, for hypertrophic cardiomyopathy (HCM), a chronic heart disease that can cause cardiac arrest.

Spokespersons for Cytokinetics and Novartis said the firms do not comment on mergers and acquisitions speculation.

Shares of Cytokinetics rose more than 16% on Monday after the Wall Street Journal first reported on Novartis’ lead.

Novartis shares were broadly unchanged in early trading in Switzerland on Tuesday.

Vontobel pharmaceuticals analyst Stefan Schneider said a deal makes sense for Novartis, with Cytokinetics active in the cardiovascular field, one of the Swiss company’s five main therapeutic areas.

Access to Cytokinetics products would help Novartis offset the expected loss of US exclusivity of Entresto, its key drug in this field, he added.

“Novartis would probably have to pay a significant premium to the current share price,” Schneider said. “Novartis could easily manage a takeover in the low double-digit billion dollar range and would also have further financial leeway for acquisitions afterwards,” he added.

In late December, Cytokinetics’ shares jumped more than 82% after aficamten met the main goal of a late-stage study, putting it on track to compete with a rival treatment from Bristol Myers Squibb.

Shares of Cytokinetics, with a market capitalisation of more than $9bn at Friday’s closing price, have more than tripled in value since October 31, when reports of the firm attracting takeover interests first surfaced.

HCM is the most common inherited cardiovascular disorder, with about 280,000 patients in the US now, including two-thirds with obstructive HCM and the rest with nonobstructive HCM, the company estimates.