Novartis buys NeuTec for

Published: 7-Jun-2006

Novartis is buying NeuTec Pharma in a


Novartis is buying NeuTec Pharma in a £305.1m agreed deal as the Swiss group looks to develop the UK biotech's two key drugs Mycograb and Aurograb.

The cash agreement, which NeuTec's board is advising shareholders to accept, values each NeuTec share at £10.50 (Euro 15). This represents a premium of 108.9% to the closing mid-market price of NeuTec's shares of 502.75 pence on 5 June, the last dealing day before talks were finalised.

Novartis said it is attracted by NeuTec's two highly promising biotech drugs: Mycograb, a genetically recombinant antibody used to treat invasive candidiasis - a potentially life-threatening fungal infection; and Aurograb, also a genetically recombinant antibody, to be used with antibacterials for the treatment of Staphylococcus infections.

Mycograb is designed for use in combination with amphotericin B, while Aurograb is to be used with vancomycin for treating hospital-acquired infections. The Swiss group says the combined market for both sectors last year was $3.2bn.

Mycograb has been submitted for EU approval, while submission in the US is planned for 2009. Aurograb is expected to be submitted for EU and US approval in 2010. Additional clinical trials will be carried out to expand further the potential of both therapies, Novartis said. In April, NeuTec said it expected to launch Mycograb in Europe by the end of the year.

"Mycograb has been shown to significantly lower the mortality of patients with severe fungal infections," said Novartis chairman and ceo, Dr Daniel Vasella. "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."

NeuTec ceo Professor James Burnie added: "The treatment of hospital-acquired infectious diseases is increasingly moving towards combination therapy to improve outcomes and prevent the occurrence of resistance. We believe that our products based on naturally occurring antibodies are well suited to address this challenge.

"The reach and resources of Novartis will help to maximise the potential of Mycograb and Aurograb to treat more patients and have a greater impact in an area with unmet medical need.'

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