Novo Goes Public With $3.1 Billion Bid to Pressure Ablynx

Novo Nordisk A/S, the Danish drugmaker battling slumping prices in diabetes, made an unsolicited 2.6 billion-euro ($3.1 billion) offer for Belgium’s Ablynx NV to beef up its lesser known blood-disorder unit in an effort to rekindle growth.

Chief Executive Officer Lars Fruergaard Jorgensen is embarking on his first takeover attempt a year after taking the reins to gain medicines that command high prices because they target rare diseases. Ablynx has one treatment called caplacizumab poised for approval this year for a disorder in which blood clots form in small blood vessels. But Novo may not be the only drugmaker interested in buying the Ghent, Belgium-based company.

“We envisage Novo needing to hike the offer and could see counter-bids,” Peter Welford, an analyst at Jefferies Group LLC in London, wrote in a note to clients.

The proposal, which Ablynx rejected, includes an upfront cash offer of 28 euros a share and potential cash payments over time of up to 2.50 euros per share, according to a Novo Nordisk statement Monday. The maximum payment is 44 percent more than the stock’s closing price on Friday in Brussels.

No Talks

Novo shares rose less than 1 percent to 339.75 kroner at 9:40 a.m. in Copenhagen. Ablynx was suspended on the Brussels stock exchange pending a statement. The company, whose stock has almost doubled since the beginning of 2017, could be worth as much as 36 euros per share if all the outcomes included in the contingent value right that Novo offered are successful, according to Welford and colleagues.

Jorgensen presented the latest offer to Ablynx’s board on Dec. 22, following a previously undisclosed 26.75-euro-per-share bid earlier in December. He called his counterpart at Ablynx, Edwin Moses, to try to start talks on Jan. 5, and again the Belgian company’s board refused, according to Novo. Moses and another executive did not immediately return calls to their offices or mobile phones.

The takeover proposal comes as Novo Nordisk, the world’s biggest maker of insulin, faces increased competition. Though the market for diabetes drugs is huge — around $40 billion in sales — that’s drawn a flood of similar treatments from the world’s largest drugmakers, forcing them to compete on price for many older products. A new entry called Ozempic, approved by the U.S. Food and Drug Administration last month, is expected to help.

Rare Disorders

Novo Nordisk shares have risen 32 percent in the past year, valuing the company at 846 million kroner ($136 billion).

Ablynx develops drugs from proteins known as nanobodies. Caplacizumab addresses the rare disorder called acquired thrombotic thrombocytopenic purpura, in which blood clots form in small blood vessels throughout the body. The illness can block the flow of blood to the body’s organs, according to the U.S. National Heart, Lung and Blood Institute.

The company is also developing a treatment for auto-immune disorders such as rheumatoid arthritis and systemic lupus erythematosus, as well as a viral infection in infants.

Novo’s announcement is part of a flurry of pharmaceutical industry deal news that investors can expect this week because JPMorgan Chase & Co.’s health-care investment conference, a key deal-making venue, kicks off Monday in San Francisco. Celgene Corp. announced late Sunday that it had agreed to buy closely held Impact Biomedicines for $1.1 billion upfront to gain an experimental blood cancer treatment.

Evercore is acting as financial adviser to Novo Nordisk, according to the statement.

— With assistance by Ari Altstedter, K Oanh Ha, and Phil Serafino

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