Actelion and J&J Are in Talks About Takeover of Swiss Drugmaker

  • Shares of Actelion soar by most in more than 16 years
  • Deliberations said to be at an early stage after initial offer

J&J Said to Make Takeover Approach for Actelion

Johnson & Johnson is in talks with Actelion Ltd. about a potential takeover of the $19.9 billion Swiss drugmaker, the companies said Friday, as the U.S. health-care giant works to expand its pharmaceutical lineup.

Actelion and J&J confirmed the approach in separate statements Friday, saying it’s not certain that a deal will happen. Actelion is working with an adviser to explore options, and the deliberations are still at an early stage following J&J’s initial offer, according to people familiar with the matter, who asked not to be identified because the talks are private. The company may also attract other suitors, such as Novartis AG and Sanofi, separate people with knowledge of the matter said.

J&J said in its statement that it didn’t have any additional comment. Representatives of Novartis and Sanofi declined to comment.

Jean-Paul Clozel

Source: Actelion Ltd.

Shares of Allschwil, Switzerland-based Actelion jumped the most in more than 16 years on Friday. While Actelion, Europe’s largest biotech firm, has been named as a potential takeover target for years, Chief Executive Officer and co-founder Jean-Paul Clozel has previously said the company planned to remain independent. The 61-year-old, who is one of Actelion’s largest shareholders, may now be more open to entertaining a sale at a sufficient premium, one of the people said.

An acquisition would add to the $246 billion of pharmaceutical deals announced this year, data compiled by Bloomberg show.

Shares Gain

Actelion shares closed up 17 percent to 184.50 Swiss francs in Zurich Friday, the biggest one-day gain since April 2000. New Brunswick, New Jersey-based J&J, with a market capitalization of about $308 billion, rose less than 1 percent to $114.03.

A bid for Actelion could go as high as 250 Swiss francs, said Eric Le Berrigaud, an analyst at Bryan Garnier & Co. in Paris. Sanofi in particular would benefit, he said, by strengthening its portfolio in areas such as multiple sclerosis and rare diseases.

“It fits really well with what Sanofi is looking for,’’ Le Berrigaud said.

J&J Chief Financial Officer Dominic Caruso has previously said he would consider deals of any size that fit into the strategy of building up its three main businesses -- consumer, medical devices and pharmaceuticals. The company agreed to buy the eye-surgery equipment unit of Abbott Laboratories for $4.33 billion in September.

Lung Drugs

Actelion has brought to market two new lung medicines that are poised to become blockbusters over the next three years. That will reduce dependence on Tracleer, a medicine to treat a type of high blood pressure that affects arteries in the lungs, which accounted for more than half its revenue last year.

Sales of Tracleer may plummet following the introduction of cheaper copycats in the first quarter of 2017. Meanwhile, revenue from Opsumit is projected to surpass $1 billion next year, while Uptravi is forecast to cross that threshold in 2019, according to analysts surveyed by Bloomberg. For the longer term, the company is also developing experimental drugs for insomnia, lupus and multiple sclerosis.

The move is an unusual one for J&J, which has grown its pharmaceutical sales 40 percent since 2010 almost entirely through in-house product development and licensing deals to become the health company’s biggest unit. With Actelion’s $19.9 billion market valuation at Friday’s close, a deal could also be larger than any the drugmaker has done previously, according to data compiled by Bloomberg.

The company has business needs that may not be easy to fill in-house. J&J’s biggest drug, the arthritis medication Remicade, generated $6.6 billion in 2015. It is projected to decline as it faces competition from products known as biosimilars, which are less-expensive versions of complex biotechnology drugs. Pfizer Inc. began selling Inflectra, a biosimilar version of Remicade, on Nov. 21, though the two pharmaceutical companies are locked in a legal battle over the validity of the original patents.

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