J&J Ends Deal Talks With Actelion in Potential Boost For Sanofi

  • U.S. drugmaker was said to offer more than $27 billion
  • Swiss biotech says it’s in discussions with another company

Sanofi Said to Step in on Actelion as J&J Walks Away

Johnson & Johnson said it ended discussions for a potential deal with Actelion Ltd., narrowing the playing field in the bidding war for the $22 billion Swiss drugmaker, which said it remains in talks with another party.

French pharmaceutical giant Sanofi is in talks with Actelion, the Wall Street Journal reported, citing unidentified people. Actelion on Tuesday said it “is engaged in discussions with another party regarding a possible strategic transaction.”

Actelion -- Europe’s largest biotech -- was built by Chief Executive Officer Jean-Paul Clozel, his wife Martine Clozel and a team of scientists who split from Roche Holding AG. The discovery of the blockbuster Tracleer propelled it over a decade ago to becoming a leader in the treatment of pulmonary arterial hypertension. The Clozels have over the years succeeded in fending off potential bidders and keeping the company independent.

Jean-Paul Clozel

Photographer: Lucas Schifres/Bloomberg

J&J on Tuesday said it pulled out after failing to arrive at an agreement that would create "adequate value" for its shareholders. The U.S.-based company on Nov. 29 significantly increased its offer to more than $250 per share, or more than $27 billion, after Actelion rejected an earlier bid for being too low, according to people who asked not to be identified because deliberations were private.

Bloomberg News reported on Dec. 6. that Sanofi had been considering a bid for Actelion and informally made its interest known. Calls to Sanofi’s Paris headquarters outside normal business hours weren’t answered.

Competition

CEO Clozel, 61, is one of the company’s largest stockholders, with about 5 percent of the shares outstanding, and previously has said he wants Actelion to remain independent, so any bidder would have to win him over. Actelion on Tuesday said that "there can be no certainty at this point that any transaction will result.”

“I don’t see why I should” sell, Clozel said in a November interview before the J&J bid was revealed. “What would it bring? It’s not a question of money. We have enough money.”

The bidding war for Actelion has emerged at a time of fierce competition among drug companies worldwide for new medicines and assets. Both J&J and Sanofi have lost out on big deals in the past two years. Sanofi had bid for cancer drugmaker Medivation Inc., which was acquired by Pfizer Inc. in August for about $14 billion. J&J was beat out by AbbVie Inc. last year for a $21 billion takeover of another cancer biotech, Pharmacyclics Inc.

J&J’s Chief Financial Officer Dominic Caruso said at a September conference that the company sees “plenty of opportunity to expand our business with M&A,” though it’s “patient and disciplined in that regard.”

Actelion’s current market value is about $22.5 billion Swiss francs, or $22.2 billion.

Ernie Knewitz, a spokesman at New Brunswick, New Jersey-based J&J, declined to comment beyond the press release. Actelion representatives didn’t immediately respond to requests for comment after business hours.

— With assistance by Johannes Koch

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