Novartis has agreed to acquire Endocyte for $2.1 billion, the companies said today, in a deal that expands the buyer’s radioligand therapy (RLT) pipeline of targeted oncology treatments with a Phase III candidate and several early-stage candidates.

Endocyte is a developer of targeted therapies that combine the company’s small molecule drug conjugate (SMDC) technology with companion imaging agents designed to assist in therapy selection.

Endocyte’s lead candidate is 177Lu-PSMA-617, a potential first-in-class RLT candidate designed to treat metastatic castration-resistant prostate cancer (mCRPC). 177Lu-PSMA-617 is designed to target the prostate-specific membrane antigen (PSMA), present in approximately 80% of patients with mCRPC by delivering the short-range beta-emitting radioactive isotope lutetium (177Lu) selectively to tumor cells while bypassing non-PSMA-expressing healthy cells.

177Lu-PSMA-617 is now under study in the Phase III global VISION trial (NCT03511664) in men with mCRPC. As of Tuesday, the VISION trial was recruiting patients toward an estimated enrollment of 750. VISION is designed to compare overall survival (OS) in patients with progressive PSMA-positive mCRPC who receive 177Lu-PSMA-617 plus best supportive/best standard of care, versus patients treated with best supportive/best standard of care alone.

Last month, the FDA agreed to radiographic progression-free survival (rPFS) as an alternative primary endpoint to OS in the trial, which has an estimated primary completion date is August 20.

In June, a research team published Phase II results in The Lancet showing a median prostate-specific antigen (PSA) PFS of 7.6 months in 50 patients with PSMA-positive mCRPC who were treated with 177Lu-PSMA-617.

Also in Endocyte’s pipeline are additional RLT candidates that include 225Ac-PSMA-617, now in preclinical studies for the treatment of mCRPC. The company has also applied its SMDC platform to develop chimeric antigen receptor T-cell (CAR-T) adaptor molecules, or CAMs, that are each constructed with one FITC molecule combined with a ligand capable of binding to cancer cells.

Liz Barrett, CEO, Novartis Oncology.
Liz Barrett, CEO, Novartis Oncology.

Radiopharmaceutical Growth

Novartis expanded into radiopharmaceuticals in January, when it completed its $3.9 billion acquisition of Advanced Accelerator Applications (AAA). That deal gave Novartis Lutathera® (lutetium Lu 177 dotatate / INN: lutetium (177Lu) oxodotreotide), the first-ever approved peptide receptor radionuclide therapy, which is indicated for somatostatin-receptor positive gastroenteropancreatic neuroendocrine tumors (GEP-NETs), an orphan disease.

“Today's announcement about the proposed acquisition of Endocyte builds on our growing capability in radiopharmaceuticals, which is expected to be an increasingly important treatment option for patients and a key growth driver for our business,” states Liz Barrett, CEO, Novartis Oncology. “We are also excited about the opportunity to break into the prostate cancer arena with a near-term product that has the potential to make a meaningful impact for patients in great need of more options.”

Endocyte’s planned acquisition comes a year after it agreed to license the RLT candidate from ABX for up to $172 million-plus, and refocus its development efforts around the prostate cancer treatment.

“Since acquiring exclusive worldwide rights to develop and commercialize PSMA-617 agents in 2017, the entire Endocyte team, along with our partners, have worked tirelessly to build a leading RLT portfolio and create value for patients and shareholders alike. We are thrilled that Novartis recognizes the potential for 177Lu-PSMA-617 to change the treatment landscape for men with mCRPC, as well as the broader role that RLTs may potentially play in the treatment of cancer,” Endocyte President and CEO Mike Sherman said in a company statement.

Endocyte President and CEO Mike Sherman
Endocyte President and CEO Mike Sherman

Added Potential in Prostate Cancer

Novartis said in a separate statement that the deal would enable it to investigate potential development of 177Lu-PSMA-617 for use in earlier lines of prostate cancer therapy.

“The global reach and expertise of Novartis in developing and commercializing RLT therapies will be critical in efforts for patients to benefit from these therapies as quickly as possible,” Sherman added.

Four months earlier in June 2017, Sherman oversaw a restructuring in which Endocyte eliminated approximately 40% of its workforce, approximately 30 jobs, leaving it with 47 employees. Endocyte further shrunk its workforce last year, ending 2017 with 44 full-time employees, 33 of whom were engaged in R&D activities, according to the company’s Form 10-K annual report, filed February 27.

As part of the restructuring, Endocyte said it was ending patient enrollment in a Phase I trial of its folate receptor-targeted tubulysin solid tumor cancer candidate EC1456 (NCT01999738), but continuing enrolling a “small number” of patients in a Phase I ovarian cancer surgical study of EC1456 (NCT03011320). Both studies were active but not recruiting patients as of July 24, according to

Endocyte would be Novartis’ third multi-billion-dollar acquisition in the past 12 months, and its second in 2018. On May 15, Novartis expanded its presence in neuroscience and gene therapy by completing an $8.7 billion acquisition of AveXis.

Novartis has agreed to merge with a newly-formed Endocyte subsidiary by purchasing all outstanding shares of Endocyte for $24 a share, a 54% premium over yesterday’s closing price of $15.56. Novartis expects to fund the acquisition through available cash.

Endocyte’s board has unanimously approved the acquisition deal. It is expected to be completed in the first half of 2019, subject to approval by Endocyte stockholders, antitrust and regulatory approvals and other customary closing conditions.

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