Novartis to acquire Britain-based NeuTec for $570 million

Novartis to acquire Britain-based NeuTec for $570 million

Novartis to acquire Britain-based NeuTec for $570 million

Novartis AG said Wednesday it would acquire NeuTec Pharma PLC for $570 million (305 million pounds; euro443 million) in cash, adding two highly promising anti-infection drugs to its portfolio.

The offer, which translates to 1,050 pence a share, represents a 14 percent premium over Tuesday's close, Novartis said. The Swiss-based drugmaker said the deal has been unanimously recommended by the British company's board of directors.

"Our proposed acquisition of NeuTec exemplifies our commitment to innovative medicines for severely ill patients," Novartis Chief Executive and Chairman Daniel Vasella said in a statement.

NeuTec, formed in 1997, specializes in developing medicines against hard-to-treat infections acquired in hospitals, known as "superbugs."

It currently has two medicines in clinical development. Mycograb, used with antifungals to treat candida infections, is scheduled for submission to U.S. health authorities in 2009. Aurograb, used with antibacterials to treat staph infections, will be submitted in 2010.

"In clinical trials, Mycograb has been shown to significantly lower the mortality of patients with severe fungal infections," Vasella said. "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."

Novartis said the deal already has the support of major shareholders representing 39 percent of NeuTec. It said it expects the offer, which is subject to regulatory approval, to close in the second half of this year.

Novartis shares were up 0.1 percent at US$55.30 (66.95 Swiss francs; euro42.95) in Zurich trading. NeuTec shares soared more than 15 percent to US$19.99 (1,069.75 pence; euro15.53) in London.