Novartis AG agreed to buy closely held Spinifex Pharmaceuticals Inc. for at least $200 million, adding an experimental drug for chronic pain.
Novartis will make extra payments to Spinifex’s investors, which include the fund that controls insulin maker Novo Nordisk A/S, based on the medicine meeting development goals, Spinifex said in a statement on Monday. Future payments may reach an additional $500 million, the Australian Financial Review reported, without saying where it got the information.
Spinifex’s EMA401 drug is designed to treat neuropathic pain, a chronic condition caused by damage or dysfunction in the nervous system. As many as 8 percent of adults suffer from neuropathic pain, Basel, Switzerland-based Novartis said in a statement. The market for treating the condition may reach $3.5 billion by 2022, according to Spinifex.
“Current treatments for neuropathic pain do not relieve pain in all individuals or are not well tolerated, so drugs targeting a new treatment modality are needed urgently,” Spinifex said.
The company’s therapy curbed pain among people suffering from a complication of shingles in a mid-stage study published in The Lancet last year. Spinifex is based in Stamford, Connecticut, and Melbourne. The drug was developed from research at the University of Queensland in Australia.
Deutsche Bank AG is the financial adviser to Spinifex on the deal, and Goodwin Procter LLP is serving as legal counsel.