Novartis to buy Chinook for up to $3.5 billion in boost to late-stage pipeline

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(Reuters) -Novartis said on Monday it agreed to acquire Seattle-based biotech firm Chinook Therapeutics for up to $3.5 billion to boost its late-stage drug development line-up with a new treatment for a rare severe kidney disease.

The transaction, in the form of a merger of a newly formed Novartis subsidiary and Chinook, is expected to close in the second half of 2023, the Swiss drugmaker said in a statement.

Under the agreed deal, Chinook shareholders would receive $3.2 billion, or $40 per share, in cash plus a contingent value right worth up to $300 million, depending on certain regulatory achievements, it said.

Chinook shares closed at $23.99 on Friday.

The U.S. biotech firm expects to see the pivotal readout in the fourth quarter of this year of a clinical trial in the third and last stage of development of oral drug candidate atrasentan to treat a kidney disease known as IgAN.

Chinook also has zigakibart, another experimental IgAN treatment, under development and plans to start a Phase 3 in the third quarter of 2023.