Swiss drug giant Novartis has agreed to pay up to $3.5 billion to acquire Chinook Therapeutics, which short seller Muddy Waters said last month was manipulating research findings to mask certain side effects of its kidney disease therapies.
Novartis is to shell out $40 per share to Chinook investors, plus a contingent value right worth up to $4 per share, depending on certain regulatory achievements, according to a Monday press release.
Chinook shares, which closed just under $24 each Friday, were up more than 67% in pre-market trading Monday.
The announcement is a blow to short outfit Muddy Waters, which less than a month ago alleged Chinook had ‘‘systemically manipulated’’ research findings to obscure trial results indicating ‘‘increased risk of serious cardiovascular events.’’ Muddy Waters argued this made it ‘‘highly unlikely’’ for Chinook to obtain approval for its flagship product candidate, atrasentan.
In a follow-up report last week, Muddy Waters accused Chinook of window dressing its financials through the use of a Chinese firm, SanReno Therapeutics. The short seller said Chinook’s reported 2021 and 2022 revenue figures were massively inflated and said these should be adjusted downward by -95.3% and -68.5%, respectively.