J&J and Crucell in Advanced Negotiations for €1.75B Acquisition Deal

U.S. healthcare giant says Crucell would become vaccines center within its pharmaceutical group.

Johnson & Johnson (J&J) and Crucell report that they are in advanced negotiations that could see the U.S. healthcare giant acquire the Dutch vaccine firm for €1.75 billion (about $2.2 billion) in cash. J&J already holds about  an 18% equity stake in Crucell, and the ongoing negotiations are heading toward a €24.74 ($31.5) per share public offer for the latter’s outstanding ordinary shares.

J&J says Crucell’s expertise in the discovery, commercialization, and manufacture of vaccines represents a strong platform for ongoing and future vaccine development. If the takeover goes ahead, Crucell would operate as the center for vaccines development within J&J’s pharmaceuticals group. The Netherlands-based firm’s facilities in Leiden would be retained along with senior Crucell management, and Crucell’s employee levels would also remain relatively unchanged, J&J notes.

J&J’s existing stake in Crucell was acquired as part of a September 2009 agreement through which the companies are collaborating on the discovery, development ,and commercialization of monoclonal antibodies and vaccines for treating flu and other infectious and noninfectious diseases. Initially focused on the development of a universal monoclonal antibody product against flu and a universal flu vaccine, the five-product deal involved a J&J affiliate in the Netherlands shelling out a tad over €300 million (about $382 million) to purchase about an 18% stake in Crucell.

Crucell is focused on the development of vaccines and antibodies against a range of infectious diseases, with a strong leaning toward products for developing countries. The firm has a range of pediatric, travel, endemic and respiratory vaccines already on the market, and a pipeline of vaccines and antibodies against flu, tuberculosis, malaria, Ebola, and Marburg viruses, HIV, and RSV. Its antibody pipeline includes preclinical and clinical candidates against rabies, flu, and hepatitis C. Product development is carried out both in-house, and through collaborations with firms including GlaxoSmithKline, J&J, and Sanofi Pasteur.

Crucell’s development portfolio is underpinned by a range of technologies for vaccine and antibody development. The firm’s core PER.C6® platform for the development of industrial-scale vaccine, recombinant protein, antibody, and gene-therapy products has already been the subject of over 45 commercial licenses, the firm notes.

Within just the last four months Crucell announced a vaccine development collaboration with Sanofi Pasteur in the field of pediatric and respiratory vaccines, and a new RSV vaccine discovery program under its collaboration with J&Js Ortho-McNeil-Janssen Pharmaceuticals business. The firm also recently started a Phase I malaria vaccine trial in Burkina Faso in collaboration with NIAID, and plans to start a Phase I study in the U.S. and Africa with a combination of two AIDS vaccine candidates, This trial will be led by the International AIDS Vaccine Initiative.

Crucell achieved product sales of €304 million (roughly $387 million) in calendar year 2009, with 59% of sales deriving from pediatric vaccine sales. Overall product sales in 2008 were €283 million ($360 million).  On top of its product sales Crucell made another €33.7 million ($43 million) in license revenues and service fees in 2009.  Profit for 2009 reached €23.9 million ($30 million), up 68% on 2008.