27 January, 2017
The purchase gives Johnson & Johnson access to the Swiss group's highly profitable range of medicines for rare diseases.
Johnson & Johnson said on January 26 it was launching an agreed all-cash offer of $280 per share (280.08 Swiss francs) for Swiss drugmaker Actelion.
Immediately before the acquisition goes through, Actelion will spin out its research and development unit into a newly-created company based in Switzerland, called R&D NewCo.
Johnson & Johnson is to hold a substantial minority interest in the spin-off company, which will be listed on the SIX Swiss Exchange, and will initially take 16 percent of its shares while holding the option to acquire more at a later date. It will be led by Actelion Chief Executive and co-founder Jean-Paul Clozel. News of the deal sent Actelion's stock price up 21 percent.
The purchase of Actelion is the first major deal in a year expected to bring heavy merger and acquisition activity as drug firms grapple with pressures ranging from lagging productivity, new competition from biosimilars, and uncertainty around drug pricing. Delinia's shareholders could see another $475 million in milestone payments as its molecules advance into the clinic.
The deal, announced Thursday by both companies, ends weeks of seesaw negotiations.
"In making this offer, Johnson & Johnson is recognising 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", said Clozel.
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"We believe this transaction offers compelling value to both Johnson & Johnson and Actelion shareholders", said Alex Gorsky, chairman and CEO of J&J.
Actelion shares have risen over 50% since speculation about the takeover began in November.
Meanwhile, the transaction deals a blow to Sanofi, which had also courted Actelion.
Actelion's pulmonary arterial hypertension drugs are complementary to Johnson and Johnson's Janssen Pharmaceuticals' portfolio, and the new research company will increase the latter's investment in the development of new drugs.
J&J will pay $280 per share for Actelion, which is the Swiss franc equivalent of Sfr280.08 per share. By using offshore cash to pay for the acquisition, J&J is also taking steps that might lower its future tax bills as Congress eyes an overhaul of the USA tax code.
Lazard, Citigroup, and law firms Cravath, Swaine & Moore; Homburger; and Sexton Riley are advising Johnson & Johnson, while Bank of America Merrill Lynch, Credit Suisse, and law firms Niederer Kraft & Frey; Wachtell, Lipton, Rosen & Katz; and Slaughter and May are advising Actelion.