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Novartis Nears Deal to Buy Medicines Co. for $85/Share: WSJ

James Ludden

(Bloomberg) -- Novartis AG is close to a deal to buy Medicines Co., the developer of a promising cholesterol drug, for $85 a share, according to news reports.

An agreement could be announced today, according to the Wall Street Journal, which assigned a $7 billion price tag to the deal. Umer Raffat, an analyst at Evercore ISI, put the transaction value at $9.1 billion when taking the fully diluted shares into account.

The Swiss drugmaker has been conducting due diligence on the Parsippany, New Jersey-based company, Bloomberg reported last week. At $85 a share, Novartis would be paying about a 45% premium over where the stock traded before the Bloomberg report.

Snapping up Medicines Co. would complement Novartis’s stable of drugs to treat heart failure. Medicines Co.’s injectable drug inclisiran cleared a key hurdle this summer as a late-stage study showed it cut bad cholesterol levels in half over 18 months. High levels of the substance are a leading cause of heart attacks.

“This will be a major execution story,” Raffat wrote in a note. “The asset itself is very elegant, but the market needs to be majorly developed.”

Novartis Chief Executive Officer Vas Narasimhan has relied on deals to sharpen the company’s focus on innovative drugs for cancer and rare diseases. The Basel, Switzerland-based company has announced close to $16 billion of acquisitions since he took over in February 2018, according to data compiled by Bloomberg. He has also spun off the Alcon Inc. eye-care division and ditched a stake in a consumer-health venture.

To contact the reporter on this story: James Ludden in New York at jludden@bloomberg.net

To contact the editors responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net, Ian Fisher

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