Novartis AG (NYSE:NVS) entered a pact to take over The Medicines Company (NASDAQ:MDCO) at a premium to Friday’s closing price. The deal is fixed at $9.7 billion that includes convertible debt and stock options. Novartis will conclude the deal early next year.

Expands drug portfolio

Novartis decided to acquire the cholesterol drug maker as part of its aim to increase drug portfolio. It focuses on innovative option – Inclisiran drugs to treat cardiovascular diseases by reducing bad cholesterol.

CEO of The Medicines, Mark Timney, said the unwavering commitment and relentless efforts of its employees have helped to unlock the potential of Inclisiran to the patients and reward the shareholders. The company is pleased that the new drug will help millions of patients suffering from hypercholesterolemia and atherosclerotic cardiovascular disease.

According to the Chairman of The Medicines, Alexander J. Denner, this transaction offers a great value for the shareholders. He said this transformation under the leadership of the newly constituted board, and the team advances toward the new therapy offers a great value to the investors and provides a new treatment option to the patients.

Denner said the main aim of developing Inclisiran is to offer a widely available and affordable treatment to reduce the economic and medical burden of the patients suffering from cardiovascular disease. They have decided to divest the company because the new drug development requires huge sums to realize the potential.

Challenges Sanofi and Amgen

With this takeover, Novartis challenges cardiovascular medicines offered by Regeneron Pharmaceuticals, Amgen, and Sanofi. Vas Narasimhan, Chief Executive Officer of Novartis, is ready to spend billions of dollars as evident from this deal. The company paid $7.8 billion in 2018 for AveXis, a gene therapy specialist.

Inclisiran is subject to the regulatory nod. The physicians need to administer Inclisiran just two times a year when compared to twenty-six injections of Repatha of Amgen and Praluent cholesterol-lowering drugs of Regeneron and Sanofi. Vas is confident that new drug will generate attractive ROI and improve sales beginning in 2021. Harry Kirsch, CFO, said the company expects to generate more than the investments from this new drug. Novartis predicts that a new drug would become a best seller.