Novartis AG shared in an official statement that it managed to strike a deal to acquire a stake in Oxford BioMedica Plc, allowing the Swiss drug manufacturer to work with the U.K.-based gene therapy specialist on a new cancer treatment.
The Chief Executive Officer of British Oxford BioMedica – Mr. John Dawson shared that the deal highlights his companys ability “to solve complex gene and cell therapy manufacturing challenges”. Mr. Dawson also said: “We hoped it would lead to this from the first deal, and had to work for a year to make sure we could do what we promised.”
Under the terms of the deal, Novartis will pay up to $90 million over the next three years to Oxford BioMedica, which will develop and make materials needed for the highly experimental CART-19 leukaemia treatment program. Novartis will acquire a 2.8% stake in the U.K.-based company, which in turn will receive royalties from future revenues of the medicine that has been developed as a collaboration between Novartis and the University of Pennsylvania.
Under the terms of the deal, about $14 million will be paid by Novartis in advance, including a $4.3-million equity subscription for a non-exclusive worldwide development and commercialization license in oncology under the LentiVector platform of Oxford BioMedica.
The agreement will bolster Oxford BioMedicas presence in one of the flourishing areas of cancer research. The U.K.-based company will also be able to improve its financial position and ease investor skepticism, having operated at a loss since its founding in 1995. The gene-therapy specialists revenues have so far failed to cover its research expenditures, forcing the company to tap investors for fresh cash.
As Chief Executive Officer Dawson said, the deal with Novartis will give Oxford BioMedica financial freedom. “If all goes to plan then the assumption is there will be no need to go back to the market again,” he added.
Novartis AG fell by 1.29% on Friday in Zurich to close at CHF84.50 per share, marking a one year change of +26.12% and valuing the drug maker at CHF228.67 billion.