A very narrow discount—but not a premium—to the deal price makes perfect sense.
The deal has to go through because NVS has contracted with the ex-CEO of Speedel and other Speedel insiders to acquire their shares, giving NVS a majority of the shares outstanding. Under Swiss law, NVS is required to offer all other Speedel shareholders the same terms.
Moreover, the chance is nil that another company will sweeten the offer. NVS is the only company who can realize cost synergies from consolidating all Tekturna activities, including manufacturing, under one roof.
Let’s talk biotech! “The efficient-market hypothesis may be the foremost piece of B.S. ever promulgated in any area of human knowledge!”
›Novartis Buying Company That Developed Cast-Off Blood Pressure Pill
by Sarah Rubenstein July 10, 2008
Alice Huxley was working at Novartis when it was in the early stages of research on the blood pressure drug that’s now known as Tekturna. But Novartis didn’t want to see it through at the time, so Huxley left and started her own company, Speedel, to work on it. Now, Novartis plans to acquire Speedel for $881 million.
Tekturna, sold overseas as Rasilez and known generically as aliskiren (no coincidence that it sounds like Huxley’s first name), hasn’t been flying off of pharmacy shelves so far. U.S. sales of Tekturna were $47 million in the first five months of 2008, according to data from Wolters Kluwer Health. But Novartis hopes to build its sales so it can someday replace Diovan, its multi-billion-dollar seller that’s expected to lose patent protection in the U.S. in 2012.
Novartis already has rights to sell Tekturna worldwide, but said in a news release that acquiring Speedel would help speed up further development of the drug, especially as a combo with other drugs, and advance other parts of Speedel’s pipeline.
Speedel’s story was the subject of a front-page WSJ article last year about small companies that try to make something of molecules that Big Pharma decides not to plunge its own resources into. Huxley first operated Speedel out of her attic, the WSJ noted. Novartis’s Basel headquarters are a bit more plush, though Huxley’s future there isn’t clear. She’s offered to resign as Speedel’s CEO, though the board hasn’t decided on that yet.‹
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