Novartis set to acquire Regulus for up to $1.7 billion

SAN DIEGO - Regulus Therapeutics Inc. (NASDAQ:RGLS), a biopharmaceutical company currently valued at $223 million, has agreed to be acquired by Swiss pharmaceutical giant Novartis AG in a deal that could total approximately $1.7 billion. According to InvestingPro data, the company has shown remarkable momentum, with its stock surging over 130% in the past six months. The transaction, announced today, involves an initial cash payment of $7.00 per share, valuing Regulus at $0.8 billion, with a possible additional $7.00 per share tied to a contingent value right (CVR) based on the regulatory approval of Regulus’ lead product candidate, farabursen.

This acquisition price represents a 274% premium over Regulus’ 60-day volume-weighted average stock price and a 108% premium over its closing price on Monday. The total consideration includes the CVR, which would be paid if the milestone related to farabursen, a potential treatment for ADPKD (autosomal dominant polycystic kidney disease), is met. InvestingPro data shows analysts are optimistic about the company’s prospects, with price targets ranging from $6 to $28 per share.

Completion of the transaction is anticipated in the second half of 2025, pending the satisfaction of customary closing conditions, including regulatory clearances and the tender of a majority of Regulus’ outstanding shares.

Regulus’ CEO, Jay Hagan, expressed enthusiasm about the merger, emphasizing Novartis’ capabilities to potentially deliver farabursen to patients with limited treatment options. Shreeram Aradhye, President of Development and Chief Medical Officer at Novartis, highlighted the drug’s potential as a first-in-class therapy for ADPKD, a leading genetic cause of renal failure.

Until the transaction’s completion, Regulus will continue to operate independently. Financial advisory services for the deal are being provided by Evercore, with Latham & Watkins LLP serving as legal counsel to Regulus.

The tender offer for Regulus’ shares has not yet commenced, and the solicitation and offer to buy shares will be made pursuant to a tender offer statement to be filed with the SEC. These documents will be available free of charge on the SEC’s website and on Regulus’ website in the investor relations section.

This report is based on a press release statement and contains forward-looking statements regarding the expected benefits and timing of the transaction, which involve certain risks and uncertainties. Investors are advised to read the tender offer and Solicitation/Recommendation Statement documents when they become available for detailed information before making any decisions. InvestingPro reveals that Regulus maintains a strong financial position with more cash than debt and a healthy current ratio of 10.98, indicating solid short-term liquidity. Subscribers to InvestingPro have access to 14 additional investment tips and comprehensive financial metrics to make more informed investment decisions.

In other recent news, Regulus Therapeutics announced successful results from its Phase 1b clinical trial of farabursen, aimed at treating autosomal dominant polycystic kidney disease (ADPKD). The trial, which included 26 subjects in its fourth cohort, met its primary endpoints, demonstrating a halt in the growth of total kidney volume and a significant increase in urinary PC1 and PC2 protein levels. This promising development has led the company to plan a pivotal Phase 3 trial later this year. Additionally, Regulus reported a net loss per share of $0.20 for the fourth quarter, slightly better than the consensus estimate of $0.21. The company holds a cash position of $75.8 million, expected to fund operations into early 2026. Analyst Yanan Zhu from Wells Fargo upgraded Regulus from Equal Weight to Overweight, raising the price target from $3.00 to $6.00, citing the positive clinical updates. H.C. Wainwright maintained a Buy rating with a $10 price target, highlighting the interim results from the farabursen study. Investors remain attentive as Regulus moves closer to its Phase 3 trial, with expanded patient data expected to provide further insights into the drug’s efficacy.

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