Johnson & Johnson Approaches Swiss Firm Actelion About Potential Deal -- 2nd Update
November 25 2016 - 3:58PM
Dow Jones News
By Jonathan D. Rockoff
Johnson & Johnson said Friday it is in "preliminary
discussions" with Swiss drug company Actelion Pharmaceuticals Ltd.,
a deal that would help the health-products company overcome looming
competition to its top-selling drug.
New Brunswick, N.J.,-based J&J has been trying to reassure
Wall Street that it can overcome competition to its drug Remicade,
an autoimmune therapy that had $4.5 billion in U.S. sales last
year. Pfizer Inc. has said it plans to start selling its copy,
Inflectra, in the U.S. this month.
J&J has argued that it has several new drugs in development
whose launch could make up for any revenue loss. A deal for
Actelion, however, would help J&J quickly plug the lost sales,
which analysts estimate could amount to $1 billion in 2017.
Actelion sells drugs for rare diseases, such as an artery
disorder that affects the lung and heart known as pulmonary
arterial hypertension. The company reported about 1.785 billion
Swiss francs ($1.8 billion) in sales during the first nine months
of this year.
A deal for all of Actelion would come at a steep price. As of
Wednesday's close, Actelion had a market value of about 16.7
billion Swiss francs. With a typical takeover premium of 25% or
more, a deal for the company would be valued at more than $20
billion.
Shares of Actelion rose nearly 17% to 182.50 Swiss francs
($184.03) on the SIX Swiss Exchange on Friday, after the company
confirmed J&J had approached it about a possible transaction.
Bloomberg had earlier reported J&J's interest in the Swiss
company.
With a market value more than $300 billion and billions of
dollars in cash overseas, J&J could afford the high price.
J&J's biggest deal to date was the $21 billion acquisition of
trauma-device maker Synthes in 2011.
Both J&J and Actelion cautioned in their statements that a
transaction wouldn't necessarily happen. It isn't clear where talks
between the companies stand or whether Actelion is receptive.
Actelion was founded in 1997 by husband-and-wife team Jean-Paul
and Martine Clozel and other former Roche Holding Ltd. employees
who left the Swiss drug firm after it decided not to pursue a
project their group was working on, according to its website.
In 2000, Actelion went public and its valuation has climbed
sharply since then.
This year, it successfully averted a decline in revenue after
its best-selling drug Tracleer lost patent protection, thanks to a
swift ramp-up in sales for new pulmonary arterial hypertension
drugs Opsumit and Uptravi.
Last year, the company reported revenue of 2.05 billion Swiss
francs and a profit of 551.9 million Swiss francs ($556.5
million).
Johnson & Johnson makes an array of products from baby soap
to Tylenol pills and devices that manage diabetes care. In
September, it reached a deal to buy Abbott Laboratories'
eye-surgery equipment business for $4.3 billion.
Rare diseases aren't an area of focus for the company. Yet
Actelion's top-selling drugs could complement J&J's portfolio
of heart drugs, and rare-disease therapies would fit with J&J's
stated goal of providing treatments that make a difference for
patients.
Big drug companies such as Pfizer and Sanofi SA have prioritized
rare diseases, because advances understanding the molecular roots
of disease have led to new treatments and health insurers have been
willing to pay the high costs because few of their members require
treatment.
Shares of J&J rose nearly 1% to close at $114.13 Friday on
the New York Stock Exchange.
--Austen Hufford and Denise Roland contributed to this
article
Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com
(END) Dow Jones Newswires
November 25, 2016 15:43 ET (20:43 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Johnson and Johnson (NYSE:JNJ)
Historical Stock Chart
From Mar 2024 to Apr 2024
Johnson and Johnson (NYSE:JNJ)
Historical Stock Chart
From Apr 2023 to Apr 2024