Novartis makes offer for NeuTec Pharma

Acquisition adds two highly promising biotech drugs to portfolio

09-Jun-2006

Novartis announced a recommended public offer to acquire NeuTec Pharma plc, a UK biopharmaceutical company specializing in hospital anti-infectives with a strong late-stage portfolio as well as a platform of early research activities. The NeuTec Board of Directors has unanimously recommended a cash offer by Novartis to acquire NeuTec for GPB 10.50 per share that values NeuTec's entire issued share capital at approximately GBP 305 million (USD 569 million).

"Our proposed acquisition of NeuTec exemplifies our commitment to innovative medicines for severely ill patients. In clinical trials, Mycograb has been shown to significantly lower the mortality of patients with severe fungal infections. Both Mycograb and Aurograb promise to dramatically improve the treatment possibilities in this area, and will also enable Novartis to strengthen its biologics pipeline and anti-infective drug portfolio," said Dr. Daniel Vasella, Chairman and CEO of Novartis.

Shareholders of NeuTec representing 39% of the existing issued ordinary share capital have expressed support and intend to accept the offer. These shareholders comprise members of the NeuTec Board of Directors, who have provided firm commitments for 9%, and institutional shareholders who have given support for a further 30% of the company.

The acquisition of NeuTec will expand the offering of specialty medicines by Novartis, which includes the company's oncology portfolio, and expand access to the dynamic hospital segment of the worldwide anti-infectives market.

Mycograb is a twice-daily intravenous genetically recombinant antibody fragment, or "grab," add-on treatment targeting heat shock protein 90 ("hsp90") developed for treatment of invasive candidiasis. This life-threatening fungal infection, which is due to the Candida species, has a high mortality rate. Mycograb binds to the fungal hsp90, preventing the fungal defense mechanism and making the fungi more susceptible to antifungals such as amphotericin B.

Aurograb is a twice-daily intravenous genetically recombinant antibody fragment, or "grab." It is an add-on treatment that targets Staphylococcus aureus, including the difficult-to-treat strains of Methicillin-Resistant Staphylococcus Aureus (MRSA), considered an important hospital-acquired (nosocomial) bacterial infection. Aurograb works by binding to a Staphylococcus aureus surface antigen, making the bacterial more susceptible to antibacterial agents.

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