Novartis AG (NYSE:NVS) Enters Agreement to Acquire Cadent Therapeutics for $770 Million

Novartis AG (NYSE:NVS) has signed a definitive agreement to acquire all outstanding capital stock of US-based neurosciences firm Cadent Therapeutics for around $770 million.

Novartis to pay $210 million upfront for the acquisition of Cadent

Once the companies close the agreement, Cadent will receive an upfront payment of $210 million and will be eligible for milestone payments of up to $560 million. Privately held Cadent Therapeutics which develops cognitive, mood, and movement disorders therapies launched in 2017 through a merger of Ataxion Therapeutics and Luc Therapeutics. The focus of the merged company was the production of small molecules that target neuronal ion channels. Currently Cadent is developing a schizophrenia drug and already it has an alliance with Novartis for the development of a treatment-resistant depression drug.

With the acquisition, Novartis will acquire full rights to Cadent’s neuroscience portfolio that include the NMDAr program. The program comprises of two clinical programs, MIJ-821, an NMDAr negative allosteric modulator licensed to Novartis five years ago, and CAD-9303 an NMDAr positive allosteric modulator. MIJ821 is currently in the second phase study overseen by Novartis and will be beneficial to patients that don’t respond to current therapies. Novartis will also receive exclusive rights to CAD-1883 which is a clinical-stage SK channel positive allosteric modulators currently in development for the treatment of movement disorders.

Acquisition to help advance Cadent’s pipeline

Cadent Therapeutics CEO, Jodie Morrison said that since the launch of the company the team has been focusing on creating a portfolio of a next-generation small molecule for movement disorders, mood, and cognitive treatment. He added that Novartis’ expertise in CNS therapeutics development which is something Cadent has witnessed through its existing alliance offers an ideal foundation for the advancement of Cadent’s pipeline. Morrison added that Novartis will help ensure the full potential of the treatments is realized for patients.

So far Cadent Therapeutics shareholders and board of directors have approved the transaction. Novartis and cadent expects the transaction to close in Q1 2021. However, the closing of the deal is subject to normal closing conditions that include an antitrust review as per the Hart-Scott-Rodino premerger notification program.