Novartis AG has agreed to acquire Tourmaline Bio Inc. for approximately $1.4 billion, marking another strategic bolt-on acquisition as the Swiss pharmaceutical giant works to strengthen its drug pipeline ahead of anticipated generic competition. The company will pay $48 per share in cash for the New York-based biotech, representing a premium of about 60% to Tourmaline's Monday closing price of approximately $30.
The acquisition centers on Tourmaline's promising anti-inflammatory cardiovascular therapy, pacibekitug, an anti-IL-6 IgG2 antibody drug designed to treat atherosclerotic cardiovascular disease (ASCVD). This condition, caused by plaque buildup in arterial walls, encompasses related conditions including coronary heart disease and peripheral artery disease that remain the leading cause of morbidity and mortality globally, according to the American Heart Association.
Strategic Response to Generic Competition
The deal comes as Novartis faces mounting pressure from generic competition for three key drugs later this year, including its top-selling heart medicine Entresto. CEO Vas Narasimhan has been actively pursuing acquisitions that could boost sales beyond 2025, having also agreed to buy US biotech Regulus Therapeutics in April in a deal potentially valued up to $1.7 billion.
"This deal makes strategic sense as it complements Novartis's cardiovascular franchise that focuses on high, unmet need in cardiovascular diseases," Stefan Schneider, an analyst at Vontobel, wrote in a note.
Addressing Unmet Medical Need
Pacibekitug represents a potential breakthrough in cardiovascular care, targeting an area with significant unmet medical need. "With no widely adopted anti-inflammatory therapies currently available for cardiovascular risk reduction, pacibekitug represents a potential breakthrough in addressing residual inflammatory risk in ASCVD," said Shreeram Aradhye, Novartis's President of Development and Chief Medical Officer.
The focus on systemic inflammation as a major driver of cardiovascular disease aligns with Novartis's strategy of developing innovative medicines for specific disease areas. Under Narasimhan's leadership, the company has spent years revamping its aging portfolio and narrowing its focus to innovative medicines in targeted therapeutic areas.
Market Response and Financial Performance
Tourmaline Bio stock surged as much as 57% in premarket trading Tuesday, with shares trading just under the offer price at $47.25. The biotech's shares had already gained nearly 72% in the 12 months through Monday's close. Novartis stock fell slightly in early trading but remains up about 15% since the start of the year.
The acquisition follows a strong financial performance for Novartis in the first quarter, when the company raised its outlook for the year after profit beat estimates, driven by medicines for breast cancer, multiple sclerosis, and psoriasis.
The transaction has been approved by the boards of both companies and is expected to close in the fourth quarter of 2025, pending customary closing conditions.
