ZURICH (Reuters) - Swiss drugmaker Novartis AG will not pay more royalties for asthma drug Xolair if U.S. biotech firm Genentech Inc. buys Tanox Inc. as planned.
"If Genentech is successful in acquiring Tanox, our rights in this partnership will not change and any royalties paid to Tanox will then be paid to Genentech," Novartis spokesman John Gilardi said. "Our rights under this agreement will not change."
Genentech, which is majority owned by Swiss drugmaker Roche Holding AG, said on Thursday it plans to buy Tanox for about $919 million to boost income from the anti-asthma treatment.Genentech, Tanox and Novartis have been working together since 1996 to develop and market the drug.
Genentech said that by acquiring Tanox it would eliminate royalties it pays to Tanox in connection with Xolair, a treatment for moderate to severe allergic asthma.
Novartis's current royalty payments to Tanox will go to Genentech if the deal goes through, but there will be no change in the amounts, Gilardi said.
Novartis shares had fallen in early trade on Friday on concerns that the planned Tanox deal might affect Novartis's royalty payments from the drug.
Stocks were also hit by U.S. election results, as gains by Democrats could hurt the drug sector if the party fulfils a promise to let Medicare negotiate lower prices for medicines.