Here’s Why AveXis (AVXS) Investors Are Celebrating Today
AveXis (NASDAQ:AVXS) investors are busy throwing a party today following the news that Novartis (NYSE:NVS) has reached an agreement to acquire AveXis for $8.7 billion, or $218/share, an 88% premium to Friday’s closing price.
AveXis said the transaction was unanimously approved by the Boards of Directors of both companies. The companies expect AveXis’ lead product candidate, AVXS-101, “to enhance Novartis’s position as a gene therapy [GT] and neuroscience leader”. AveXis further announced Novartis will commence a tender offer no later than 17 April 2018. The deal is expected to complete in mid-2018.
The tender offer is subject to customary closing conditions and termination provisions for both AveXis and Novartis, including a right for either party to terminate if the transactions have not been completed by July 6, 2018. Novartis is allowed under certain antitrust circumstances to extend the Outside Date to October 6, 2018, in which case the offer price will increase from $218 per share to $225 per share in cash.
AveXis CEO Sean Nolan commented, “The commitment, drive and expertise of the entire AveXis team has created significant stockholder value, and we are pleased that Novartis recognizes that value in the potential of AVXS-101, our first in class manufacturing capabilities and our gene therapy pipeline, all of which serve to transform the lives of people devastated by rare and life threatening neurological diseases such as SMA, Rett syndrome and genetic ALS […] With worldwide reach and extensive resources, Novartis should expedite our shared vision of bringing gene therapy to these patient communities across the globe as quickly and safely as possible.”
Wall Street is predominantly showcasing positive sentiment on the drug maker, with TipRanks analytics demonstrating AVXS as a Buy. Based on 12 analysts polled in the last 3 months, 8 rate a Buy on AveXis stock while 4 issue a Hold. The 12-month average price target stands at $153.36, marking a nearly 32% upside from where the stock is currently trading.