Chinook Therapeutics shares soar in Novartis purchase

Key takeaways

  • Novartis has agreed to buy Chinook Therapeutics for up to $3.5 billion.
  • Chinook shareholders will receive $40 per share, with up to $4 more per possible share.
  • Chinook shares jumped more than 56% in early trading on the Monday following the news.

Chinook Therapeutics (KDNY) shares soared on Monday after Novartis (NVS) has agreed to buy the biopharmaceutical company for $3.5 billion.

The deal values ​​Chinook's shares at at least $40 per share, a 67% premium to the company's closing price on Friday. Chinook shareholders would receive the $40 per share in cash at closing, with up to an additional $4 per share after reaching certain regulatory milestones. Novartis said the transaction would take the form of a merger between Chinook and a new Novartis subsidiary.

Novartis noted that Chinook has two high-value drugs in late-stage development for rare and serious chronic kidney disease. He explained that the purchase is fully in line with his strategy to focus on innovative drugs and will “significantly expand his renal portfolio, complementing the existing pipeline.”

Eric Dobmeier, CEO of Chinook, added that through the merger, “Novartis can apply its substantial resources to pursue broader development and commercialization efforts” of Chinook treatments.

Companies reported that They expected the deal to close in the second half of this year.

Chinook Therapeutics shares have rose more than 56% at 11:30 a.m. EST to their highest level this year. Novartis shares were down 1%.


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