Novartis Launches Tender Offer to Acquire Regulus Therapeutics in $7 Per Share Deal, with Potential Bonus Payout Linked to Regulatory Milestone
In a strategic move that underscores its continued investment in innovative biotechnology, Novartis announced today that its wholly owned indirect subsidiary, Redwood Merger Sub Inc. (the “Purchaser”), has officially launched a tender offer to acquire all outstanding shares of Regulus Therapeutics Inc. This acquisition offer represents a significant development in the biotech sector, particularly in the field of RNA-targeted drug discovery, which Regulus is known for pioneering.
Regulus Therapeutics, a publicly traded Delaware corporation, specializes in the development of microRNA-based therapeutics and has drawn attention for its novel approach to modulating gene expression. Novartis, a global healthcare company known for its robust pipeline and deep investments in innovation, is seeking to fully integrate Regulus into its growing biopharmaceutical portfolio.
Financial Terms of the Offer
The terms of the tender offer were disclosed in a formal filing with the U.S. Securities and Exchange Commission (SEC) on May 27, 2025. Under the terms of the offer, Novartis is proposing to purchase all outstanding shares of Regulus common stock at a price of $7.00 per share in cash, with the additional potential for a contingent value right (CVR) worth up to an additional $7.00 in cash per share, subject to the achievement of a predetermined regulatory milestone. All cash payments under this offer are subject to any applicable tax withholdings and will not accrue interest.
The CVR is a significant component of the proposed acquisition, as it provides Regulus shareholders the opportunity to receive a second cash payment, effectively doubling their return on investment, should the company reach the agreed-upon regulatory milestone. This provision reflects Novartis’s confidence in the future success of Regulus’s research programs, particularly in areas such as kidney disease and liver fibrosis, where microRNA therapeutics have shown promising early results.
The tender offer is being made pursuant to the terms outlined in the Offer to Purchase document dated May 27, 2025, and included in the SEC’s Schedule TO filing. This offer is further supported by the Agreement and Plan of Merger signed on April 29, 2025, by and among Novartis, the Purchaser, and Regulus Therapeutics.
Offer Expiration and Conditions
According to the terms detailed in the Offer to Purchase, the tender offer is set to expire at one minute past 11:59 p.m., New York City time, on June 24, 2025, unless it is extended or terminated earlier in accordance with the provisions laid out in the merger agreement.
Should there be any change to the expiration date, Novartis has committed to issuing a public statement as promptly as possible. In the case of an extension, the announcement will be made no later than 9:00 a.m. Eastern Time on the following business day after the originally scheduled expiration.
The successful completion of the tender offer is contingent upon several standard conditions being met. Chief among these is the requirement that a sufficient number of shares be tendered and not withdrawn before the expiration of the offer. Specifically, Novartis requires a majority of outstanding shares—defined as one share more than 50% of the total outstanding common shares of Regulus—as of the expiration time.
Another critical condition involves compliance with U.S. antitrust law. The offer is subject to the expiration or early termination of the waiting period mandated by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. This legal step ensures that the proposed acquisition does not violate federal antitrust statutes.
Importantly, the offer is not contingent on financing, which underscores Novartis’s strong cash position and financial commitment to completing this transaction.
Regulatory Filings and Board Support
To ensure transparency and compliance with U.S. securities law, Novartis has filed a tender offer statement on Schedule TO with the SEC. This filing includes the full Offer to Purchase, which outlines the terms, conditions, and procedures that Regulus shareholders must follow to tender their shares.
Simultaneously, Regulus Therapeutics has filed a solicitation/recommendation statement on Schedule 14D-9, in which the company’s board of directors offers its official recommendation regarding the offer. Notably, the Regulus board has unanimously recommended that shareholders accept the offer and tender their shares to Novartis’s Purchaser subsidiary.
This endorsement from Regulus’s board is a crucial element in securing shareholder participation and is indicative of the board’s confidence in the financial terms and strategic value of the deal.
Role of Advisors and Agents
To facilitate the tender offer, Novartis has engaged Innisfree M&A Incorporated as the information agent. In this role, Innisfree will serve as the primary point of contact for Regulus shareholders who have questions regarding the offer or require assistance with tendering their shares.
Shareholders can contact Innisfree at the following numbers:
- Toll-free (U.S. and Canada): (877) 800-5186
- International (outside U.S. and Canada): +1 (412) 232-3651
Additionally, Computershare Trust Company, N.A. will act as the depositary and paying agent, responsible for managing the actual transfer of shares and distribution of payment to shareholders who accept the offer.
Strategic Rationale Behind the Acquisition
The acquisition of Regulus Therapeutics aligns with Novartis’s strategic priority of bolstering its pipeline with differentiated and potentially transformative technologies. MicroRNA-based therapeutics represent an emerging frontier in precision medicine, targeting gene expression at the post-transcriptional level. Regulus’s research has the potential to create first-in-class therapies for chronic and hard-to-treat conditions, including chronic kidney disease (CKD) and nonalcoholic steatohepatitis (NASH).
Novartis’s investment in Regulus also signals an intent to deepen its presence in RNA-targeted medicine—a field it has already explored through collaborations and acquisitions. The contingent value right further reflects the company’s confidence in Regulus’s clinical development prospects and commitment to sharing the upside potential with Regulus shareholders.
If the tender offer is successful and the merger is completed, Regulus will become a wholly owned subsidiary of Novartis. The transaction is expected to close promptly following the successful completion of the offer and satisfaction of all closing conditions.
In the interim, both companies will continue to operate independently. Regulus’s ongoing clinical trials and research programs will proceed as planned, with Novartis expected to provide further guidance on integration timelines and operational synergies post-closing.
Novartis’s launch of a tender offer to acquire Regulus Therapeutics marks a pivotal moment in the evolution of RNA-based drug development. With a compelling cash offer and a generous CVR tied to future regulatory success, Novartis is offering Regulus shareholders a strong immediate return and a potential second payout. Backed by both companies’ boards and framed by a clear regulatory and financial roadmap, this acquisition is poised to unlock new scientific frontiers while delivering value to patients, shareholders, and the broader biomedical community.
