Seattle-based biotech Chinook Therapeutics Inc. (Nasdaq: KDNY) aims to boost its drug development efforts after major acquisition news.
On Sunday, Chinook announced it is being acquired by the Swiss pharmaceutical giant Novartis AG (NYSE: NVS) for $3.2 billion. Chinook CEO Eric Dobmeier said the resources and expertise of Novartis can be a major benefit to Chinook.
"They'll be able to apply those resources to do more with our drugs than we would have been able to do on our own, which is going to be good for patients," Dobmeier said.
He noted the strong financial offer was appealing as well, and Chinook and Novartis had been in partnership talks before the acquisition. He added that Chinook wasn't expecting an acquisition and that Novartis' offer was "inbound."
Novartis is paying $40 per share to acquire Chinook, but Chinook shareholders could receive an additional up to $4 per share if its lead drug candidate, atrasentan, hits certain regulatory milestones. If Chinook hits those milestones, the deal price would become roughly $3.5 billion. The companies expect the deal to close in the second half of this year, contingent on shareholder approval.
Chinook was founded in 2019. The company is focused on kidney diseases, and atrasentan is in phase 3 clinical trials for treatment of immunoglobulin A nephropathy, which results in inflammation that damages kidney tissues. Dobmeier said the company expects to read data from those trials in the fourth quarter. Atrasentan is in phase 2 trials for other kidney diseases, and the company has a drug called BION-1301 that is also aimed at immunoglobulin A nephropathy.
Chinook has roughly 260 employees, including about 80 in the Seattle area, Dobmeier said. The company also has offices in Oakland and Vancouver, B.C.
Dobmeier said that though Chinook has some open positions, its long-term growth is up to Novartis after the deal closes. The same is true for Chinook's brand and office space, which is in South Lake Union. Dobmeier said the Chinook team expects to join Novartis, but that's another decision that will ultimately be made after closing.
Novartis has more than 90 products on the market, according to its website. The company says it has about 108,000 employees.
Dobmeier spent 15 years at Bothell-based biotech Seagen earlier in his career. Seagen announced in March it is being acquired by Pfizer for $43 billion in a deal expected to close late this year or early next year.
Dobmeier said that while many Seattle-area biotechs have been acquired, that isn't necessarily a bad thing for the region's status as a biotech hub.
"A lot of these people get recycled into new startups and grow additional companies and help the ecosystem grow," Dobmeier said. "Overall, Seattle has a really strong biotech ecosystem, and I think this is going to continue to happen."
