KEY TAKEAWAYS
- Novartis said Tuesday it is buying Tourmaline Bio for $1.4 billion, in a deal that gives the Swiss pharma giant access to the biotech’s late-stage cardiovascular drug pacibekitug.
- Novartis said it would offer Tourmaline Bio shareholders $48 a share, an almost 60% premium to Tourmaline’s closing price Monday of $30.18.
- Wedbush downgraded its rating for Tourmaline to “neutral” at the $48 price, noting that Novartis will be able to help Tourmaline advance progress in pacibekitug.
Tourmaline Bio (TRML) shares have had a strong run this year. News that Swiss pharma giant Novartis (NVS) is buying the small biotech firm for $1.4 billion to complement its cardiovascular pipeline is giving Tourmaline a fresh boost.
On Tuesday, Novartis said it is buying Tourmaline for $48 per share, an almost 60% premium to Tourmaline’s closing price Monday of $30.18. The deal, expected to close in the fourth quarter, gives Novartis access to Tourmaline’s targeted therapy drug pacibekitug. Tourmaline’s shares are up more than 50% after the news.
The drug is in advanced phase 2 clinical trials, and according to Novartis President Shreeram Aradhye, “represents a potential breakthrough” in reducing systemic inflammation in atherosclerotic cardiovascular disease, or ASCVD.
Wedbush analyst Laura Chico said the Swiss firm will be able to help Tourmaline advance pacibekitug. “While there is always potential for additional suitors to make a competing bid, we see the NVS platform as an ideal spot for pacibekitug and the acquisition price representing a fair/full offer,” Chico wrote, downgrading the Wedbush rating on Tourmaline to a “neutral” from “outperform” given the analyst’s price target of $48, the same as Novartis’ offer price.
Shares in Tourmaline Bio are up 58% in midday trading Tuesday, more than doubling so far this year. Novartis shares are little changed in midday trading and have gained more than 30% this year.
