$280 per share deal will give J&J Actelion PAH franchise and late-stage pipeline

Johnson & Johnson (J&J) is to acquire Actelion in a $30 billion cash deal that will give J&J Actelion’s commercial portfolio of rare disease drugs and late-stage pipeline, but see the Swiss biopharma's R&D operation and early clinical assets spun out into a new, standalone company headed by Actelion CEO Jean-Paul Clozel, M.D. Agreement on an acquisition deal follows 2 months of on–off discussions between the firms and reported moves by Sanofi to beat J&J to a successful takeover bid. 

Actelion’s pulmonary arterial hypertension (PAH) franchise will complement Janssen Pharmaceutical's existing pipeline, J&J states. The U.S. pharma giant will also get an initial 16% stake in the new R&D company and hold a convertible note for an additional 16%. The Actelion R&D spin-out will launch with a CHF 1 billion (approximately $1 billion) cash pot, and inherit Actelion’s discovery and development team and drug discovery engine, based at the firm’s R&D site in Allschwil. J&J will in addition receive an option on ACT-13277, which is in Phase II development for resistant hypertension.

J&J is offering $280 (about CHF 280) per share for Actelion, which compares with the Swiss firm’s CHF 227.4 per share price at close the previous day. Actelion’s share price jumped 20% during early trading in Europe on the morning of the announcement. J&J says the transaction is expected to be immediately accretive to its EPS, with an estimated $0.35 to $0.4 accretion in the first full year. The firm anticipates that the transaction will also increase its long-term revenue growth rate by at least 1.0% and its long-term earnings growth rate by 1.5% to 2.0% above analysts’ expectations. The deal has been unanimously approved by both boards and is expected to close by the end of Q2 2017.

“We believe this transaction offers compelling value to both Johnson & Johnson and Actelion shareholders,” said Alex Gorsky, J&J chairman and CEO. “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.”

The deal will give J&J Actelion's existing PAH franchise, which includes its Opsumit®, Uptravi®, Tracleer®, Veletri®, and Ventavis®. Other marketed Actelion products included in the transaction are Valchlor® (mechlorethamine gel) for the treatment of stage IA and IB mycosis fungoides-type cutaneous T-cell lymphoma (MF-CTCL), and Zavesca® (miglustat), a reversible inhibitor of glucosylceramide synthase for the treatment adult patients with mild to moderate type 1 Gaucher disease. J&J will in addition secure global rights to ponesimod, an sphingosine-1-phosphate (S1P1) receptor 1 modulator in Phase III development for multiple sclerosis, and the antibiotic cadazolid, which is in Phase III development for treating Clostridium difficile–associated diarrhea.

Dr. Clozel commented, “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.”

The new R&D company will start out with a clinical development pipeline in the therapeutic areas of specialty cardiovascular disorders, central nervous system disorders, immunological disorders, and orphan diseases. “The newly created R&D company allows us to continue with our successful culture of innovation,” Dr Clozel added. “It is enormously exciting to continue to develop new and differentiated products, in multiple therapeutic areas, to improve the lives of patients.”

The deal with J&J comes just days after Actelion reported that its marketed oral endothelin receptor antagonist Opsumit® (macitentan) failed to meet its primary endpoint in a Phase III study in patients with pulmonary arterial hypertension due to Eisenmenger syndrome. 

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