Chinook Therapeutics, Inc stock surged by more than half in early trade after the company said it agreed to a $40 per share buyout offer by Novartis AG (ADR) (NYSE:NVS).
The $3.2 billion offer represents a 67% premium to Chinook’s closing price on Friday, May 9, and is 83% higher than the 60-day volume-weighted average price of its shares. Shareholders will also receive a further $4 per share if certain future regulatory milestones are achieved for its lead product candidate, atrasentan, the company said in a statement.
Its shares were 57% higher at $37.58 by 10am in New York.
Through the merger, Chinook noted that Novartis can apply its “substantial resources” to pursue broader development efforts and commercialization of atrasentan, zigakibart and other programs in its pipeline to build its global renal therapeutic area.”
“We are pleased that Novartis recognizes the significant value that the Chinook team has built with our pipeline of clinical and preclinical programs for patients with rare, severe chronic kidney diseases,” Chinook president and CEO Eric Dobmeier said.
“We believe this transaction is great news for kidney disease patients and the programs we have built at Chinook.
The company said it expects the transaction to be completed in the second half of 2023, subject to customary closing conditions.
Chinook Therapeutics is a clinical-stage biopharmaceutical company developing precision medicines for kidney diseases. Its product candidates are being investigated in rare, severe chronic kidney disorders with opportunities for well-defined clinical pathways.
Chinook’s lead program is atrasentan, a phase 3 endothelin receptor antagonist for the treatment of IgA nephropathy and proteinuric glomerular diseases. Zigakibart (BION-1301), an anti-APRIL monoclonal antibody, is being evaluated in a phase 1/2 trial for IgA nephropathy.
Contact the author at stephen.gunnion@proactiveinvestors.com