Swiss pharmaceutical firm Novartis has signed a $2.1bn deal to acquire all outstanding shares of US-based biopharmaceutical company Endocyte in order to bolster its position in radiopharmaceuticals.

Founded in 1996, Endocyte develops targeted therapeutics for cancer treatment. It is engaged in the development of 177Lu-PSMA-617, a potential radioligand therapy in Phase III development for the treatment of metastatic castration-resistant prostate cancer (mCRPC).

The company will be merged with a newly formed Novartis subsidiary once the deal is closed.

Novartis will be able to fast-track the development of innovative radioligand technology (RLT) for treating cancer if the deal goes through.

Pursuant to the terms of the agreement, the company will pay $24 per Endocyte share.

The acquisition will allow Novartis to expand its RLT platform with a near-term product launch as well as early-stage clinical development programmes.

Furthermore, the company can leverage its expertise to investigate the potential development of 177Lu-PSMA-617 for use in earlier lines of prostate cancer therapy.

Novartis Oncology CEO Liz Barrett said: "Novartis has a strong legacy of addressing unmet needs with transformative therapies and is building a leadership capability in new, technology-driven platforms that address some of the world’s most complex health challenges, including cancer.

"Today’s announcement about the proposed acquisition of Endocyte builds on our growing capability in radiopharmaceuticals, which is expected to be an increasingly important treatment option for patients and a key growth driver for our business.

"We are also excited about the opportunity to break into the prostate cancer arena with a near-term product that has the potential to make a meaningful impact for patients in great need of more options."

The completion of the acquisition is conditional on customary closing conditions, including shareholder approval and regulatory approvals.

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