Novartis AG made an official announcement, saying that it reached an agreement to purchase CoStim Pharmaceuticals Inc. in order to expand its reach in immunotherapeutics. The latter is considered to be a new field of cancer drugs and is projected to reach 35 billion dollars in annual sales.
Novartis, which is based in Basel, Switzerland, revealed in a statement today that it will purchase CoStim Pharmaceuticals Inc. – a closely held biotechnology company. The company, however, did not provide any details about the price of the acquisition.
As reported by Bloomberg, several immunotherapy programs, including one that targets PD-1, a receptor that is the focus of drugs such as Bristol-Myers Squibb Co.s nivolumab and MK-3475 of Merck & Co., are added by the purchase. One of the analysts, who work for Citigroup Inc. – Andrew Baum, said that immunotherapy may prove out to be quite a profitable market, which is now estimated to about 35 billion dollars.
The Head of the Novartis Institutes for BioMedical research – Mark Fishman, said in the statement, which was cited by Bloomberg: “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.”
At the same time, it became clear that the U.S. and European governments were pushed by the company to “apply pressure” on India in the matters of intellectual property. Novartis also warned New Delhi that its position on patents is blocking investment. The Chief Executive Officer of Novartis AG – Joe Jimenez called on India to follow the example of China and accept strong IP rights as a way to expand its economy.
Mr. Jimenez said in an interview for the Financial Times: “India is a big, important growing market but it is not a place to do research and development. If you do not have strong protection for IP, you cannot invest in… medical science. It is important for European governments and the U.S. to ensure that in free trade agreements India is respecting intellectual property. Governments should apply pressure to ensure there is respect for IP.”
Last year the Supreme Court in India rejected the application of the pharmaceutical company for a patent for a modernized version of Glivec, which is a cancer drug produced by Novartis. This verdict of the Indian Supreme Court became one of the several court rulings, which have flipped over or directly rejected patents from Western drug companies, such as Roche and Pfizer.
Novartis AGs shares fell by 0.27% to 73.70 CHF by 13:46 GMT, marking a market capitalization of CHF 200.1 billion.