After weeks of exclusive negotiations, Johnson & Johnson (NYSE:JNJ) said on Thursday that it plans to buy Swiss biotech firm Actelion (VTX:ATLN) for $30 billion in an all-cash deal. The companies have reportedly been in talks for months – Sanofi (NYSE:SNY) was also involved in discussions for Actelion, but was sidelined after J&J entered into exclusive negotiations with Actelion last month.
The companies plan to spin off Actelion’s research and development pipeline into a new company, led by Actelion CEO Jean-Paul Clozel.
J&J offered to pay $280 per share and the deal was approved unanimously by both boards of directors. The offer is a premium on Actelion’s closing price of 227.4 Swiss francs on Wednesday, Reuters reported.
“The price is quite high at around 30 times price to estimated 2018 earnings. J&J is paying a lot and R&D is not even included, just a substantial minority stake,” one Zurich-based trader told the news outlet. “But it represents only 10 percent of (J&J’s) market capitalisation and they are finally investing the cash they hold in Europe.”
Clozel has repeatedly maintained his company’s independence – in 2011, he rallied shareholders against a hedge fund’s attempt to sell the firm and 4 years later, he fought off interest from drugmaker Shire.
“We believe this transaction offers compelling value to both Johnson & Johnson and Actelion shareholders,” J&J chairman & CEO Alex Gorsky said in prepared remarks. “Actelion has built an attractive, growing business with world-class commercial and clinical development capabilities. Adding Actelion’s portfolio to our already strong Janssen Pharmaceuticals business is a unique opportunity for us to expand our portfolio with leading, differentiated in-market medicines and promising late-stage products. We expect to leverage our established global presence and commercial strength to accelerate growth and patient access to these important therapies. Further, we believe R&D NewCo will be strongly positioned to continue Actelion’s legacy of innovation and look forward to collaborating on the development of cutting-edge new therapies.”
“I’m very proud that we have created such a unique value proposition through this structured transaction,” chairman of the board of Actelion and R&D NewCo., Jean Pierre Garnier, added. “Actelion’s shareholders can monetize their holdings in Actelion at a highly attractive cash price of $280 per share, while at the same time retaining a significant stake in the future potential upside of Actelion’s earlier stage pipeline, through their ownership of R&D NewCo. Jean-Paul Clozel and I have high expectations for this new, well-funded biotech company with a significant portfolio of drugs in the clinic. R&D NewCo will be led by an experienced and proven scientific team.”
“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,” Actelion CEO Jean-Paul Clozel said. “The newly created R&D company allows us to continue with our successful culture of innovation. It is enormously exciting to continue to develop new and differentiated products, in multiple therapeutic areas, to improve the lives of patients.”
Actelion shares jumped following news of the deal. ATLN shares were trading at 273.6 Swiss francs apiece in morning activity, up 20.3%.