Report: J&J raises the stakes in Actelion pursuit

Johnson & Johnson (NYSE:JNJ) has reportedly raised its offer for Swiss biotech firm Actelion Pharmaceuticals (VTX:ATLN), pressuring the company to accept a takeover deal.

The companies have been in talks for nearly 2 months but so far have not reached a deal, according to Reuters.

The news outlet reported that Actelion wants J&J to become a major shareholder in a new entity, which would combine the Swiss group with some of J&J’s activities. But J&J is interested in a straightforward takeover.

Following news of the higher offer, Actelion shares closed up +10% at 209 Swiss francs.

Actelion co-founder and CEO Jean-Paul Clozel has repeatedly insisted that the company should remain independent, rallying shareholders in 2011 against an investor’s campaign to put the firm up for sale. Since then, Actelion’s shares have more than tripled.

Actelion shares soared last week after news of the initial offer, up +19% to a peak of 187.70 Swiss francs, which put the company at a value of $20 billion.

Allschwil, Switzerland-based Actelion’s drugs, Opsumit and Uptravi, treat high pressure in blood vessels to the lungs and analysts forecast the 2 could generate more than $4.6 billion in 2020 sales, up from an estimated $1.4 billion this year. The company’s expanding pipeline focuses on treatments for rare diseases, making it an attractive takeover target for buyers on the lookout for drugs with less pricing pressure.

When talks began in October, the 2 companies originally discussed focusing on a share deal or an asset swap, Reuters reported. Director of the London-based consultancy Novasecta John Rountree told the news outlet that a structured transaction could allow Actelion to benefit from J&J’s scale without sacrificing its independence.

J&J could also take a lesson from Roche (PINK:RHHBY), which bought 60% of Genentech in 1990 before acquiring the rest of it in 2009.

Shares in both companies have come down since the initial offer. JNJ shares were trading at $111.72 apiece in afternoon trading, down -0.7%, while ATLN shares were trading at 200 Swiss francs, down -3.9%.