Biopharmaceutical company, Regulus Therapeutics Inc. (NASDAQ: RGLS), is going to be a subsidiary of pharma-giant Novartis AG (NYSE: NVS) before long due to a recently signed merger agreement.
The company’s stock ballooned substantially by approximately 135 per cent on the news, announced Wednesday. The merger will go through for an initial payment of USD$7 a share at closing, or USD$800 million.
Furthermore, the buyer is offering a significant premium to acquire Regulus. The cash portion alone is 274 per cent higher than Regulus’ average share price over the past 60 days, and 108 per cent higher than the closing price on April 29, 2025.
In addition, Regulus shareholders will receive a bonus payment—called a contingent value right, or CVR. If regulators approve Regulus’ main drug candidate, farabursen, the CVR will pay out $7.00 per share.
If that milestone is met, the total value of the deal could reach approximately USD$1.7 billion.
Both companies’ Boards of Directors have unanimously approved the deal.
The company’s bump can also be attributed partly to encouraging early trial results for farabursen. The drug targets autosomal dominant polycystic kidney disease (ADPKD), a rare inherited kidney disease that currently lacks effective treatments. In an early-stage clinical trial, farabursen showed signs that it may slow down how quickly the disease gets worse.
“With limited treatment options currently available for patients suffering from ADPKD, farabursen represents a potential first-in-class medicine with a profile that may provide enhanced efficacy, tolerability and safety versus standard of care,” said Shreeram Aradhye, President, Development and Chief Medical Officer, Novartis.
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Clinical trial results have proven a factor
Specifically, patients receiving the drug had changes in certain biological markers linked to kidney health, including reduced kidney size. In one group, 70 per cent of patients saw their kidney volume shrink—an early sign that the treatment might work.
Investors took notice. On April 28, 2025, social media users pointed out the stock’s surge after the trial data’s release. The company also said the next group of patients are already enrolled.
The third patient group showed especially strong results. These include 70 per cent of participants which saw a reduction in kidney size. This outcome strengthened confidence in farabursen’s potential to treat ADPKD.
Meanwhile, Regulus completed enrollment for the fourth group of patients in the same study. The new results expected in early 2025. Investors are hopeful the data will move the drug into a larger Phase 3 trial.
Under the merger agreement, Novartis will launch a formal offer to buy all outstanding Regulus shares. Shareholders will receive $7.00 per share in cash once the deal closes.
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