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Actelion May Fetch $9.8 Billion as a Takeover Target

Actelion Ltd., the Swiss drugmaker that may attract a takeover offer from Amgen Inc., could fetch as much as 9.7 billion Swiss francs ($9.8 billion) in an acquisition, according to analysts.

An acquirer may pay about 70 francs per share, according to the median of 7 analyst estimates compiled by Bloomberg. The range was 65 francs to 75 francs a share. The Allschwil, Switzerland-based company’s stock closed yesterday at 54.60 francs, giving Actelion a market value of about 7.06 billion francs.

An acquisition would be the biggest purchase of a European biotechnology company since Merck KGaA bought Serono SA for 10.3 billion euros ($14 billion) in 2007, according to data compiled by Bloomberg. Actelion gets most of its sales from Tracleer, a drug to treat a lung condition known as pulmonary arterial hypertension that begins to lose patent protection in five years. The company also has two other compounds to treat the illness in late-stage testing.

“Whoever does acquire Actelion will get value not just in Tracleer until 2015, but also in the package of PAH drugs as they can leverage the lung specialists they already have for distributing Tracleer,” said Carri Duncan, an analyst at Macquarie Group in Zurich. Actelion may be worth about 65 francs a share in a takeover, based on the price Sanofi-Aventis SA has offered for Genzyme Corp., Duncan said.

‘Regular Dialogue’

Amgen, the world’s largest biotechnology company, is considering a takeover offer for Actelion and may approach the company as early as this week, two people with knowledge of the matter said Nov. 16. Amgen has declined to comment. Actelion said in a statement yesterday that it’s in “regular dialogue with other industry participants” as part of its “ordinary course of business” and declined to comment further.

Acquirers paid a median of 23 times earnings before interest, taxes and amortization for biotechnology companies in the past five years, according to data compiled by Bloomberg. Based on that multiple and last year’s Ebitda, Actelion would be valued at about 9.3 billion francs. Roche Holding AG bid about 15.7 times Genentech Inc.’s Ebitda in 2008, while Merck offered 14.6 times the Ebitda of Millipore Corp. this year.

Biotechnology companies attracted a median of 1.37 times market value over the same period, according to data compiled by Bloomberg. Based on that multiple and yesterday’s closing price, Actelion would be valued at 9.67 billion francs. Roche bid about 1.25 times Genentech market value, while Merck offered 1.69 times that of Millipore.

Shares Rise

Actelion rose 1.40 francs, or 2.6 percent, to 56 francs at the close of Zurich trading. The stock has gained 1.4 percent this year, compared with a 4.3 percent return for the Bloomberg Europe Pharmaceutical Index. The stock declined this year after disappointing clinical trials of Tracleer against a rare lung ailment and of its clazosentan experimental medicine in patients who had suffered from bleeding in the brain.

The company said last year “safety observations” in a study of its almorexant insomnia drug needed further investigation.

While takeover premiums in the biotechnology industry can range from 50 percent to 100 percent, the setbacks in clinical trials this year would likely affect the value of Actelion in a takeover, said Samir Devani, an analyst at Nomura Code in London.

“With the failures that have happened this year and the question marks over almorexant, probably nearer the lower end of the range would be fair right now,” he said.

High Blood Pressure

PAH is a potentially fatal condition that causes high blood pressure in the artery moving blood from the heart to the lungs. Actelion’s two other compounds that are designed to treat PAH are macitentan and selexipag.

Actelion’s portfolio of PAH drugs may be worth about 69 francs a share, while other experimental medicines may be worth an additional 6 francs a share, Olav Zilian, an analyst at Helvea, wrote in a research note Oct. 8.

As a defensive measure, Chief Executive Officer Jean-Paul Clozel has discussed asking Roche Holding AG, Johnson & Johnson and Bristol-Myers Squibb Co. to consider taking a minority stake, the people with knowledge of the matter said. The companies declined to comment.

Actelion has said it wants to remain independent, a stance that could make a takeover of the company difficult, said Sibylle Bishofberger, an analyst at Zuercher Kantonalbank in Zurich.

“When you buy a biotech company, you’re also buying the brainpower of its employees and if it becomes hostile you risk losing that,” she said. “Actelion has made it very clear that it wants to stand alone.”

Tracleer generated 1.51 billion francs in sales in 2009, 85 percent of the company’s revenue.

Amgen rose $1.27, or 2.4 percent, to $55.14 at 4 p.m. New York time in Nasdaq Stock Market composite trading. The shares have fallen 2.5 percent this year.

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