With the acquisition of American biotech company Chinook Therapeutics by Novartis, which might cost up to $3.5 billion, the stakes in the battle to find a cure for a rare kidney illness have been raised.

The shareholders of Seattle-based Chinook will receive $3.2 billion, or $40 per share, in cash as part of the agreed-upon purchase, along with a contingent value right with a maximum value of $300 million, according to a Monday statement from Novartis.

The advance payment is 66.7% more expensive than Chinook’s Friday closing price. In premarket trading on Monday, Chinook’s shares were trading at $40.1.

After spearheading an initiative to reduce costs and restructure the Swiss pharmaceutical company to concentrate on fewer therapeutic areas and the most promising geographic regions, Novartis CEO Vas Narasimhan is ready to raise the potential of future blockbuster pharmaceuticals.

IgAN, a rare condition that can cause kidney failure in young individuals, has attracted a variety of researchers and is already the target of a treatment candidate studied by Novartis. Chinook, whose shares ended at $23.99 on Friday, has a promising chemical targeted to treat IgAN.

Narasimham has previously stated that he will focus on deal targets with a value of less than $5 billion.

According to a statement from Novartis, the acquisition is anticipated to completion in the second half of 2023.

Chinook anticipates receiving the pivotal readout of a clinical study for the third and final stage of development of the oral medication candidate atrasentan to treat IgAN in the fourth quarter of this year.

Another investigational injectable IgAN therapy being development by Chinook is zigakibart, for which a Phase 3 trial is scheduled to begin in the third quarter of 2023.

Narasimhan had a significant victory this year when research revealed that the breast cancer treatment Kisqali, one of two new medications essential to the group’s sales growth, benefits a larger patient population.

Iptacopan, another promising medicine, is being tested against a number of uncommon hereditary diseases, including IgAN and another kidney condition.

Several businesses, including Roche, Vera Therapeutics, Ionis, Omeros, and unlisted HI-Bio, are developing potential IgAN therapies.

The autoimmune illness IgAN, which primarily affects young individuals, progresses over time and can cause kidney failure that necessitates dialysis or organ transplantation. According to Novartis, there are no possibilities for focused treatment.

IgAN can impact up to 21 persons per million per year in the US, with Asian populations being more frequently affected. According to Novartis, kidney failure in Caucasian young adults is most frequently caused by IgAN.

In the second half of 2023, Novartis wants to split off its generic medicines company, Sandoz, increasing its reliance on the success of its drug discovery business.

When short-seller Muddy Waters stated that it was betting on the company to collapse because atrasentan was unlikely to attain market maturity last month, Chinook shares fell but immediately recovered.

Last week, Muddy Waters reported that it was still lacking in Chinook.

(Adapted from Reuters.com)