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HomeFT SelectJohnson & Johnson to buy Actelion for $30bn

Johnson & Johnson to buy Actelion for $30bn

Johnson & Johnson is to acquire Swiss biotechnology company Actelion for $30bn in a complex deal that will see Actelion’s founder heading a standalone spin-off research company based and listed in Switzerland.

The world’s largest healthcare company is offering Actelion shareholders $280 per share in an all-cash offer — as well as shares in the new research and development company headed by Jean-Paul Clozel, the Swiss group’s chief executive and founder. J&J said it would fund the deal using cash held outside the US.

The deal structure fulfils Mr Clozel’s demand to keep control over early state drug development, while giving J&J access to Actelion’s lucrative treatments for rare diseases such as pulmonary arterial hypertension.

The higher-than-expected purchase price was equivalent to SFr280 per share — and compared with Wednesday’s closing price of SFr227.40.

J&J has been under pressure to build up its pipeline quickly because its best-selling drug, the arthritis injection Remicade, faces tough competition in the US. Other potential suitors for Actelion are understood to have held back in the hope of being able to repatriate funds held overseas to fund acquisitions in US under the new administration of President Donald Trump.

Since Actelion was founded in 1997 in Basel, Mr Clozel has repeated resisted takeover approaches — and as recently as last September told investors he needed another three to four years to take the company to “another level”. J&J announced it had entered exclusive talks with Actelion in December after an earlier approach had ended abruptly just a week before.

On Thursday Mr Clozel said the as yet unnamed new research and development company would “allow us to continue with our successful culture of innovation”. In making its offer, J&J was “recognising all that has been created at Actelion during the last 20 years.”

Under the deal, Actelion will spin off its drug discovery and early stage clinical development assets into a separate company, which will be listed on the Swiss stock exchange. Shares in the new company will be distributed to Actelion shareholders with J&J holding an initial 16 per cent and the rights to a further 16 per cent. Mr Clozel will be chief executive of the research company and its chairman will be Jean Pierre Garnier, Actelion’s chairman.

Mr Garnier said the J&J deal would allow shareholders to “monetise their holdings in Actelion at a highly attractive cash price of $280 per share, while at the same time retaining a significant stake in the future potential upside of Actelion’s early stage development.”

The deal, which has been backed unanimously by Actelion’s board, is expected to be closed by the end of June.

Alex Gorsky, J&J’s chief executive, said Actelion’s portfolio would strengthen his company’s Janssen Pharmaceuticals business, especially in the areas of cardiovascular and metabolic therapeutics. He expected J&J to collaborate with the new research company in developing “cutting edge new therapies”.

Mr Gorsky said: “We believe this transaction offers compelling value to both Johnson & Johnson and Actelion shareholders.”

J&J was advised by Lazard and Citibank. Actelion was advised by Bank of America Merrill Lynch and Credit Suisse.

Jean-Paul Clozel

Via FT