Pharmaceutical giant Novartis A.G. (NYSE: NVS) announced Monday morning that it will acquire startup biotech CoStim Pharmaceuticals. Terms of the deal were not revealed, but it will bolster Novartis’s cancer immunotherapy portfolio and could provide an entry into the race for PD-1 targeting therapies.
CoStim Pharmaceuticals is a Cambridge, Mass.-based, privately held biotechnology company that is focused on harnessing the immune system to eliminate immune-blocking signals from cancer. Novartis has been focused on chimeric antigen receptor (CAR-T) technology, so the expanded pipeline will allow a combined approach.
Mark Fishman, president of the Novartis Institutes for BioMedical Research, said in a statement:
Therapy for many types of cancers are expected to increasingly rely upon rational combinations of agents. Immunotherapy agents provide additional arrows in our quiver for such combinations.
Novartis earnings and revenue fell short of consensus expectations in the fourth quarter. The company continues to struggle to rein in costs, and it announced in early February that it would cut up to 4,000 jobs, or about 6% of its workforce. Expiring patents continue to sink sales of the best-selling drugs at many pharmaceutical companies. Patent expirations for blockbuster drugs Diovan and Zometa reduced Novartis’s top line by more than $2 billion in 2013.
There has been some recent speculation about a possible break up of Novartis. Both Merck & Co. (NYSE: MRK) and Eli Lilly & Co. (NYSE: LLY) reportedly may be interested in its animal health business.
Shares of Novartis were inactive in premarket trading Monday, after ending last week at multiyear high of $82.94. That is well above the mean price target posted by Thomson/First Call.