Novartis to Acquire Chinook for up to $3.5 Billion

Rare Daily Staff

Novartis agreed to acquire Chinook Therapeutics, a developer of therapeutics for rare and chronic kidney diseases, for up to $3.5 billion.

Novartis will pay $40 a share or $3.2 billion. The price represents an 83 percent premium to Chinook’s 60-day volume-weighted average stock price and 67 percent to Chinook’s closing price on June 9, 2023. In addition, Chinook shareholders will receive contingent value rights providing for payment of up to $4 per share upon the achievement of certain future regulatory milestones with respect to Chinook’s lead product candidate, atrasentan. If the milestones are achieved, the total price would be approximately $3.5 billion.

The contingent value rights to be issued to Chinook shareholders will provide for payments of up to an additional $4 per share with respect to specific regulatory approvals for atrasentan, $2 of which is related to IgA nephropathy and $2 of which is related to focal segmental glomerulosclerosis.

Completion of the transaction is expected in the second half of 2023, pending approval by Chinook’s stockholders and satisfaction of other customary closing conditions. Until that time, Chinook will continue to operate as a separate and independent company.

The boards of both companies unanimously approved the transaction. The closing of the proposed transaction is subject to certain conditions, including approval by Chinook’s stockholders, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions.

“Through this merger, Novartis can apply its substantial resources to pursue broader development efforts and commercialization of atrasentan, zigakibart (BION-1301) and other programs in our pipeline to build its global renal therapeutic area,” said Eric Dobmeier, president and CEO of Chinook Therapeutics.

Photo: Eric Dobmeier, president and CEO of Chinook Therapeutics