Novartis has agreed to buy US biopharma Endocyte, gaining access to radiopharmaceuticals, which the Swiss drugmaker has identified as a key growth driver of its business.

Under the terms of the deal, Novartis will pay Endocyte shareholders $24 per share, valuing the West Lafayette, Indiana-based firm at $2.1 billion.

Radiopharmaceuticals – drugs that contain radioactivity – are used clinically for both diagnosis and therapy. Endocyte uses drug conjugation technology to develop targeted therapies with companion imaging agents for treating cancer.

The acquisition includes 177Lu-PSMA-617, a potential first-in-class investigational radioligand therapy (RLT) for treating metastatic castration-resistant prostate cancer (mCRPC), a disease that Novartis said has limited treatment options and represents an area of significant unmet medical need.

The candidate therapy targets the prostate-specific membrane antigen (PSMA) that is present in most patients with mCRPC and has shown promising Phase II data. It is also currently being investigated in a Phase III global clinical trial in men with mCRPC.

Novartis said the deal would also enable it to investigate the potential development of 177Lu-PSMA-617 for use in earlier lines of prostate cancer therapy.

The Endocyte pipeline includes other investigational RLTs, including 225Ac-PSMA-617, which is in preclinical studies for treating mCRPC.

Liz Barrett, CEO of Novartis Oncology, said the proposed acquisition builds on the Swiss pharma’s growing capability in radiopharmaceuticals, which is expected to be an increasingly important treatment option for patients. She added: “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.”

Mike Sherman, president and CEO of Endocyte, commented: “The global reach and expertise of Novartis in developing and commercializing RLT therapies will be critical in efforts for patients to benefit from these therapies as quickly as possible.”

Completion of the transaction is expected in the first half of 2019, subject to approval by Endocyte shareholders, regulatory approvals and other customary closing conditions. Endocyte’s board of directors have unanimously approved the deal.