In an ever increasing battle for more powerful heart medications, Novartis (NYSE: NVS) has purchased The Medicines Co. (NASDAQ: MDCO) for $9.7 billion. The heart drug at the center of this acquisition is called Inclisiran, which is currently in the later stages of clinical trials. Novartis, as a company, is pursuing mergers and acquisitions to develop critical pipelines in a variety of therapies, and its acquisition of The Medicines Co. is another step in that goal.
One of Novartis' most popular cardiovascular drugs on the market right now is a heart failure drug called Entresto that has made a significant amount of money for the drug maker. This is in contrast to failures that rivals like Amgen (NASDAQ: AMGN) have had with similar cardiovascular drugs.
The $9.7 billion purchase price of The Medicines Co. is a sharp premium against the existing market cap of the drug manufacturer. At this time, The Medicines Co. has a market capitalization of $6.7 billion, implying a heavy desire to take advantage of this new pharmaceutical. Inclisiran, an siRNA, reduces the concentration of "bad" LDL cholesterol in the blood, an important pathway to recovery for patients with plaque buildup in their arteries. Profits from the sale of Inclisiran will not go entirely to Novartis, however. They will be split with Alnylam, the pharmaceutical manufacturer that invented the drug.
Inclisiran will compete with other antibodies that prevent the expression of PCSK9, which prevents the liver from clearing LDL cholesterol from the blood. One such example is Amgen (NASDAQ: AMGN)'s Repatha, which has not had the blockbuster sales the drug manufacturer had hoped for. This is a critical point for Novartis, as a performance for Inclisiran similar to that of Repatha will lead to a significant writedown for the drug manufacturer. Still, with a booming industry for heart drugs, the acquisition spree that Novartis has gone on recently is certainly something to watch.