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Vancouver-founded Chinook Therapeutics Signs Agreement to Be Acquired by Pharma Giant Novartis AG for up to US $3.5 Billion
Tuesday, June 13, 2023Company Profile | Follow Company
Vanouver, BC, June 13, 2023--(T-Net)--Chinook Therapeutics, Inc. (Nasdaq: KDNY), a biopharmaceutical company focused on the discovery, development and commercialization of precision medicines for kidney diseases, today announced that it has entered into an agreement and plan of merger with Novartis AG pursuant to which Novartis will acquire Chinook for $40 per share in cash, or a total of $4.7 billion (US $3.2 billion).
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Editor's Note on Chinook Therapeutics Background and Corporate History:
Chinook Therapeutics was founded in Vancouver and raised a major US $65 million Series-A financing led by Versant Ventures in August 2019.
Chinook was incubated through Versant's Inception Sciences discovery engine in Vancouver, BC and seeded by Versant and Apple Tree Partners. This discovery and research team, with a history of successful drug development, integrating chemistry, biology, and pharmacology expertise, joined Chinook to work on expanding a pipeline of precision medicines for kidney diseases.
Chinook Therapeutics and Aduro Biotech announced later in June 2020 that the companies had entered into a definitive merger and share swap agreement. Following the closing in November 2020, Aduro was renamed Chinook Therapeutics, Inc., and began trading on the Nasdaq Global Select Market under the ticker symbol "KDNY".
The combined company was run by Chinook's management team, and headquartered out of Chinook's existing facilities in Vancouver, BC and Seattle, WA.
The company raised a further $1115 million private placement financing, with participation from new investors, one year later in November 2020, following completion of the merger.
The company now has R&D facilities in the False Creek Flats area of Vancouver, a corporate head office in Seattle, and an additional office in Oakland, CA.
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This offer represents a premium of 83 percent to Chinook's 60-day volume-weighted average stock price and 67 percent to Chinook's closing price on June 9, 2023.
In addition, Chinook shareholders will receive contingent value rights (CVRs) providing for payment of up to $4 per share upon the achievement of certain future regulatory milestones with respect to Chinook's lead product candidate, atrasentan.
Total consideration including the contingent value right, if the milestones are achieved, would be approximately $4.7 billion (US $3.5 billion). The transaction has been unanimously approved by the Boards of Directors of both companies.
Eric Dobmeier, President and Chief Executive Officer, Chinook Therapeutics
"We are pleased that Novartis recognizes the significant value that the Chinook team has built with our pipeline of clinical and preclinical programs for patients with rare, severe chronic kidney diseases," said Eric Dobmeier, President and Chief Executive Officer of Chinook Therapeutics.
"We believe this transaction is great news for kidney disease patients and the programs we have built at Chinook. Through this merger, Novartis can apply its substantial resources to pursue broader development efforts and commercialization of atrasentan, zigakibart (BION-1301) and other programs in our pipeline to build its global renal therapeutic area."
Completion of the transaction is expected in the second half of 2023, pending approval by Chinook's stockholders and satisfaction of other customary closing conditions. Until that time, Chinook will continue to operate as a separate and independent company.
Centerview Partners LLC and MTS Health Partners, L.P. are serving as financial advisors, and Fenwick & West LLP is serving as legal counsel to Chinook.
Transaction Details
Under the terms of the merger agreement, Novartis will acquire all of the outstanding shares of Chinook through a subsidiary for a price of $40 per share in cash at closing. The CVRs to be issued to Chinook shareholders will provide for payments of up to an additional $4 per share with respect to specific regulatory approvals for atrasentan, $2 of which is related to IgA nephropathy and $2 of which is related to focal segmental glomerulosclerosis.
The closing of the proposed transaction is subject to certain conditions, including approval by Chinook's stockholders, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. A copy of the merger agreement will be filed with the Securities and Exchange Commission ("SEC") and will be publicly available.
About Chinook Therapeutics, Inc.
Chinook Therapeutics, Inc. is a clinical-stage biopharmaceutical company developing precision medicines for kidney diseases. Chinook's product candidates are being investigated in rare, severe chronic kidney disorders with opportunities for well-defined clinical pathways.
Chinook's lead program is atrasentan, a phase 3 endothelin receptor antagonist for the treatment of IgA nephropathy and proteinuric glomerular diseases. Zigakibart (BION-1301), an anti-APRIL monoclonal antibody, is being evaluated in a phase 1/2 trial for IgA nephropathy. CHK-336, an oral small molecule LDHA inhibitor for the treatment of hyperoxalurias, is in phase 1 development.
In addition, Chinook's research and discovery efforts are focused on building a pipeline of precision medicines for rare, severe chronic kidney diseases with defined genetic and molecular drivers. Chinook is leveraging insights from kidney single cell RNA sequencing and large CKD patient cohorts that have been comprehensively panomically phenotyped, with retained biosamples and prospective clinical follow-up, to discover and develop therapeutic candidates with mechanisms of action targeted against key kidney disease pathways.
To learn more, visit www.chinooktx.com.
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