Tourmaline Bio shares skyrocketed Tuesday after Novartis agreed to buy the cardiovascular-focused biotech company for $1.4 billion.
The deal comes less than two weeks after Tourmaline announced promising results for its potential atherosclerotic cardiovascular disease drug, pacibekitug, at the European Society of Cardiology. Up to 65% of patients experienced deep reductions in high-sensitivity C-reactive protein, or hs-CRP, an indicator of cardiovascular disease.
Wedbush analyst Laura Chico says the timing of the deal makes sense given Tourmaline's updated data and plans for Phase 3 testing. In May, Tourmaline said quarterly doses of pacibekitug lowered hs-CRP by a median of 85% after 90 days of treatment. That lines up with competitor ziltivekimab, a Novo Nordisk drug that requires monthly injections.
"We also see NVS as a logical partner with deep cardiometabolic expertise than can advance pacibekitug," she said in a client note.
On today's stock market, Tourmaline Bio shares soared 57.9%, closing at 47.64. Novartis stock inched down a fraction to 128.06.
'Differentiated' Asset
Earlier this month, Leerink Partners analyst Thomas Smith labeled Tourmaline one of his top picks for 2025. He called pacibekitug a "differentiated, Phase 3-ready asset." The drug could unlock multiple billions of dollars in sales, he said in a client note.
Novartis will pay $48 per share of Tourmaline Bio stock. The deal values Tourmaline at twice its current market cap. Both boards have already signed off on the deal, which is expected to close in the fourth quarter.
Wedbush's Chico says the deal "makes sense for both sides."
Tourmaline is planning to move pacibekitug into Phase 3 testing, an endeavor that requires a lot of money. Meanwhile, Novartis has the powder to pay for testing and a presence in the cardiometabolic space.
"Could additional bidders emerge?" she asked. "While we wouldn't rule this out entirely, we do think this is a low-probability scenario. The NVS offer represents a fair/full price and NVS provides a skilled partner to advance pacibekitug."
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
