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AveXis, Inc. [NASDAQ:AVXS] announced today that it has entered into an agreement and plan of merger with Novartis pursuant to which Novartis [VTX: NOVN] will acquire AveXis for USD 218 per share or a total of USD 8.7 billion in cash. This offer represents a premium of 88 percent to AveXis’ closing price on April 6, 2018, and a 72 percent premium to the company's 30-day volume-weighted average stock price. The transaction was unanimously approved by the Boards of Directors of both companies.

“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,” said Sean Nolan, President and Chief Executive Officer of AveXis. “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.”

Novartis plans a smooth transition of AveXis operations and the integration of AveXis’ talented and dedicated employees into the Novartis organization to continue the mission of bringing AVXS-101 to patients worldwide.

Completion of the transaction is expected in mid-2018, pending the successful completion of the tender offer and all other closing conditions. Until that time, AveXis will continue to operate as a separate and independent company.

AveXis’ financial advisors are Goldman Sachs & Co. LLC and Centerview Partners LLC, and Cravath, Swaine and Moore LLP and Cooley LLP are acting as legal counsel for AveXis.

Transaction Details

Under the terms of the agreement and plan of merger, Novartis has formed an acquisition subsidiary, Novartis AM Merger Corporation (“Purchaser”), that will commence a tender offer no later than April 17, 2018, to purchase all outstanding shares of AveXis for USD 218 per share in cash and AveXis will file a recommendation statement containing the unanimous recommendation of the AveXis board that AveXis stockholders tender their shares to Novartis. Following the completion of the tender offer, Novartis expects to promptly consummate a merger of Purchaser and AveXis in which shares of AveXis that have not been purchased in the tender offer will be converted into the right to receive the same cash price per share as paid in the tender offer (other than shares held by stockholders who properly demand and perfect appraisal rights under Delaware law).

The tender offer and the merger are subject to customary closing conditions, including the tender of at least a majority of outstanding AveXis shares on a fully diluted basis and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The merger agreement includes customary 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 (such date, the “Outside Date”). Novartis is permitted under specified antitrust related circumstances to extend the Outside Date to October 6, 2018. If Novartis elects to extend the Outside Date, the offer price will increase from USD 218 per share to USD 225 per share in cash.

The merger agreement provides that, in connection with the termination of the merger agreement under specified circumstances, including termination by AveXis to accept a superior proposal, AveXis will be required to pay to Novartis a fee equal to USD 284 million. The merger agreement also provides that, in connection with the termination of the merger agreement under specified antitrust related circumstances, Novartis will be required to pay to AveXis a “reverse termination fee” equal to USD 437 million, which fee increases in the event Novartis elects to extend the Outside Date in accordance with the terms of the merger agreement.

Link to release (AveXis).

Link to release (Novartis).