Business

Johnson & Johnson to buy Actelion for $43b

Johnson & Johnson to buy Actelion for $43b

US pharmaceutical company Johnson & Johnson has agreed to purchase Swiss competitor Actelion for $30 billion in cash, the companies announced Thursday.

Another part of the deal sees Actelion spinning off its drug discovery business and early-stage clinical development operations into a new Swiss biopharmaceutical company, which would then be listed on Switzerland's stock exchange, SIX.

J&J, which is the world's biggest healthcare group, is also funding a new research and development company headed by chief executive and founder Jean-Paul Clozel.

J&J said it expects the transaction to increase its long-term revenue growth rate by at least 1 percent and its long-term earnings growth rate by 1.5 to 2 percent. The companies said in a news release that they expect the deal to be closed by the end of the second quarter of 2017.

The agreement means that the American pharmaceutical company will pay $280 per share for the Swiss biotech. J&J ended at US$112.80 in NY, capping a 11.5 per cent increase past year.

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"In making this offer, Johnson & Johnson is recognizing all that has been created at Actelion during the last 20 years, and in particular the quality of our PAH franchise, the potential of our key marketed medicines and our promising late-stage development assets.

The shares have risen 12.57% since it confirmed exclusive talks with J&J on December 21 but are more than 50% higher since takeover speculation first surfaced in late November", Martin Baccardax reports for TheStreet.

Meanwhile, the transaction deals a blow to Sanofi, which had also courted Actelion. This is the second time the French drugmaker will be left empty-handed, after losing out on cancer treatment maker Medivation to another US giant, Pfizer, in August. The plan calls for two rates: 8.75 percent for profit held as cash or cash equivalents and 3.5 percent for other investments.

Actelion specializes in treatments for pulmonary arterial hypertension, including macitentan (Opsumit), selexipag (Uptravi), bosentan (Tracleer), epoprostenol for injection (Veletri) and iloprost (Ventavis). "R&D NewCo will be led by an experienced and proven scientific team", Jean Pierre Garnier, chairman of the board of R&D NewCo, said. "The drugs that they have created for hypertension, pulmonary hypertension, are industry leaders". The CEO is a believer in Actelion's pipeline of experimental medicines, and he and his wife have resisted takeover bids through the years.

Lazard Ltd is lead financial adviser to Johnson & Johnson with Citigroup Inc. also providing advice. Cravath, Swaine & Moore LLP, Homburger AG and Sexton Riley LLP are serving as legal advisors to J&J.


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