Novartis (NYS) completed on 25 June the $1.7B acquisition of Regulus Therapeutics (RGLS), a clinical-stage biotech company that will strengthen Novartis’ renal disease pipeline. Regulus Therapeutics was formed in 2007 through a joint venture between Alnylam Pharmaceuticals and Isis Pharmaceuticals with microRNA as the primary focus.

Novartis announced its intent to acquire Regulus for $800M in April 2025, after which the RGLS stock shot to $7.98 (for context, RGLS was valued at $1.75 on April 1, 2025). On June 24, Regulus Therapeutics’ stock was delisted from the NASDAQ at $8.16 a share, valuing Regulus at about $565M. So, this acquisition was completed at a significant premium.

Deal Structure & Conditions

However, this payment will be disbursed in two stages: each shareholder will get $7 cash for their shares followed by an additional $7 per share if and when Farabursen is approved by the USFDA. Such a condition is common and is termed contingent value right (CVR).

Only about 75% of the available shares of Regulus were voluntarily tendered by the shareholders. But as Novartis acquired over 50% of the company, per the acquisition agreement, the remaining 25% shares were also bought at $7 + $7 CVR. These minority shareholders could pose legal challenges and potential protracted litigation to Novartis.

Why Regulus, Why now, Why the premium?

Strategically, in biotech M&As, such premiums signal a wager on future therapies, pipeline acceleration, and platform advantage. In this case, the immediate focus is Farabursen, a next-gen oligonucleotide that targets micro-RNA miR-17, which promotes the progression of autosomal dominant polycystic kidney disease (ADPKD). Farabursen has passed Phase 1b trials and has blockbuster potential that could reach peak sales of $1B. (MedCity News, Pharmaceutical Technology.)

Novartis president, development and chief medical officer Shreeram Aradhye stated: “We are pleased to complete this transaction and take the next step in advancing clinical development for a potential first-in-class medicine that can help treat patients suffering from ADPKD (autosomal dominant polycystic kidney disease), the most common genetic cause of renal failure worldwide.”