Novartis Joins Deal Party

Not one to miss the deal-making party, Swiss drug maker Novartis AG announced its own end-of-the-year acquisition to find new revenue as a big brand-name drug faces generic competition.

Novartis says it will pay as much as $620 million for closely held Corthera Inc. to gain the experimental heart drug Relaxin, which is being tested to treat acute heart failure.

Novartis, like its big pharma competitors, is looking for new products to make up for a blockbuster that faces competition from generic drugs once a patent expires. Hypertension drug Diovan will lost its patent protection in 2012. The drug, Novartis' top seller, had sales of $4.4 billion through the first nine months of this year, an increase of 5 percent.

Like several other deals announced by rivals at the beginning of the week, Novartis is structuring its takeover of San Mateo, California-based Cothera to pay more if the drug meets clinical milestones, actually gets approved and goes on the market. The announced price for the takeover is $120 million but Corthera investors could see additional payments up to $500 million if Relaxin succeeds.

The drug has been given fast-track approval status by the Food and Drug Administration. That means the government deems it a medicine that potentially can treat a life-threatening condition and may be better than existing drugs on the market. Now let's see if it works.