Pharmaceutical company Novo Nordisk, best known for its insulin and diabetes-related products, will acquire biopharmaceutical company Dicerna Pharmaceuticals for $3.3 billion in a deal said to accelerate and expand Novo Nordisk’s RNAi therapeutics development by utilizing Dicerna’s proprietary technology.
The announced deal has already lead to litigation.
Novo Nordisk A/S (NYSE: NVO) and Dicerna Pharmaceuticals, Inc. (Nasdaq: DRNA) announced their proposed deal on November 18, pursuant to which Novo Nordisk will acquire Dicerna for $38.25 per share in cash. This represents an 80% premium to Dicerna’s closing stock price on November 17.
As noted in the filings, Dicerna is a biopharmaceutical company focused on utilizing ribonucleic acid interference (RNAi) to specifically target and silence genes “that cause or contribute to disease,” which “has the potential to address conditions that are difficult to treat with other modalities.” Furthermore, since RNAi does not seek to inhibit a protein, it can prevent the creation of disease-causing proteins, thus affecting the expression of a disease.
According to the press release, since 2019 the companies have engaged in research collaboration “to discover and develop RNAi therapies using Dicerna’s proprietary GalXC RNAi platform technology.” This collaboration included “the exploration of more than 30 liver cell targets with the potential to deliver multiple clinical candidates for disorders including chronic liver disease, non-alcoholic steatohepatitis (NASH), type 2 diabetes, obesity and rare diseases.” As a result of this effort, Novo Nordisk anticipates starting “clinical development of the first investigational RNAi therapeutic to emerge” in 2022.
Dicerna noted that its proprietary technology allows “access to intracellular targets across hepatic and extrahepatic cell and tissue types,” which reportedly complements Novo Nordisk’s technology.
“The acquisition of Dicerna accelerates Novo Nordisk’s research within RNAi and expands the usage of the RNAi technology,” Marcus Schindler, Executive Vice President and Chief Scientific Officer of Novo Nordisk, said in a press release. “We build on our successful collaboration and by combining Dicerna’s state-of-the-art RNAi drug engine and intracellular delivery with our deep capabilities in disease biology understanding and tissue targeting through peptides and proteins we have the potential to expand our pipeline and deliver life-changing precision medicines for people living with chronic diseases such as diabetes, obesity, cardiovascular disease and NASH, as well as rare diseases like endocrine disorders and bleeding disorders.”
“The combination of Dicerna’s expertise in RNAi and oligonucleotide therapeutics and highly skilled employees with Novo Nordisk’s industry leadership in developing and commercializing medicines to treat serious chronic diseases, has the potential to significantly accelerate and expand our mission to deliver GalXC RNAi therapies for the benefit of patients and all our stakeholders,” Douglas Fambrough, Ph.D., Founder, President and CEO of Dicerna, said.
According to Novo Nordisk’s press release, the deal will not impact its operating profit outlook for 2021 or its ongoing share buyback program. The transaction will largely be debt financed and the deal will cause an increase in research and development costs, likely to negatively impact its 2022 operating growth profit by about 3%.
Through the acquisition, Novo Nordisk will keep Dicerna’s previous partnerships with companies like Roche, Eli Lilly and Boehringer Ingelheim.
The reverse triangular merger is expected to close by the end of this year, subject to customary closing conditions. The deal has been unanimously approved by the boards of each company.
Dicerna is represented by Skadden, Arps, Slate, Meagher & Flom LLP and Goodwin Procter LLP and its financial advisors are Centerview Partners LLC and SVB Leerink LLC. Novo Nordisk is represented by Davis Polk & Wardwell LLP and its financial advisor is Evercore.
Prior to the announcement, on November 17, Dicerna’s stock was valued at $21.28 and Novo Nordisk’s was $114.41. When it was announced on November 18, Dicerna and Novo Nordisk’s stocks were valued at $38.03 and $115.03. More than a week later on December 1, Dicerna’s stock was relatively consistent after the announcement and valued at $38.10. Meanwhile, Novo Nordisk’s stock decreased and was valued at $107.28.