Novartis AG Sponsored ADR (NVS.US) intends to invest $3 billion to acquire Synnovation Therapeutics' assets for breast cancer drugs.

Novartis AG Sponsored ADR has agreed to acquire an experimental breast cancer drug from Synnovation Therapeutics for up to $3 billion to strengthen its oncology product pipeline. According to a statement released on Friday, the Swiss pharmaceutical giant will make an initial payment of $2 billion to the US biotechnology company, as well as up to $1 billion in milestone payments, to acquire its Pikavation Therapeutics business which is developing this potential therapy. The transaction is expected to be completed in the first half of this year, pending regulatory approval. The deal will further propel CEO Vas Narasimhan's strategy to expand Novartis AG Sponsored ADR's oncology product portfolio with precision therapies. According to analysts' expectations compiled by the market, sales of Piqray, a drug currently used by Novartis AG Sponsored ADR to treat this type of breast cancer, are expected to decline by 9% this year to around $348 million. Vontobel analyst Stefan Schneider said in a report, "Adding a next-generation asset to the existing pipeline is a strategically significant move." Urs Fritsche of Zurich Cantonal Bank said that this transaction is a "positive first step," and similar deals are expected to occur in the coming months. Both companies stated that the oral therapy is targeted at HR+/HER2- breast cancer patients and is currently undergoing Phase 1/2 studies for breast cancer and other advanced solid tumors. Novartis AG Sponsored ADR claims that the drug is designed to precisely target cancer cells while reducing the impact on normal cells, a strategy that is expected to "bring better tolerability and more durable benefits to patients." As of Thursday, Novartis AG Sponsored ADR's stock price has risen 6.6% year-to-date. Synnovation is a private company.