Chinook Therapeutics, Inc., a biopharmaceutical company specializing in the discovery, development, and commercialization of precision drugs for kidney diseases, today announced that it has entered into a merger agreement and plan with Novartis AG, under which Novartis will purchase Chinook for $40 per share in cash, or $3.2 billion in total.
This deal is 67 percent above Chinook’s June 9, 2023, closing price and 83% above the stock’s 60-day volume-weighted average price. Additionally, Chinook shareholders will acquire contingent value rights (CVRs), entitling them to receive payments of up to $4 per share upon reaching specific future regulatory milestones pertaining to Chinook’s lead product candidate, atrasentan.
If the milestones are met, there would be a total consideration of almost $3.5 billion, including the contingent value right. The boards of directors for both businesses have unanimously endorsed the deal.
Eric Dobmeier, president, and chief executive officer of Chinook Therapeutics, stated, “We are thrilled that Novartis recognizes the enormous value that the Chinook team has built with our pipeline of clinical and preclinical programs for patients with uncommon, severe chronic kidney illnesses.
” We think that this deal is fantastic news for people with kidney illnesses and the programs we have established at Chinook”.
In order to expand its global renal therapeutic area, Novartis can use the combined company’s significant resources to explore the development and commercialization of further programs in our pipeline, including atrasentan, zigakibart (BION-1301), and others.
The transaction is anticipated to close in the second half of 2023, subject to Chinook’s stockholders’ approval and the fulfilment of other standard closing conditions. Chinook will continue to run as a distinct and independent business up until that point.
Chinook has financial counsel from Centerview Partners LLC, legal assistance from Fenwick & West LLP, and medical advice from MTS Health Partners, L.P.
