The weeks of negotiation between Johnson & Johnson and Actelion have resulted in a deal that will see the Swiss biotech’s R&D unit spun-out into a separate company.
J&J has agreed to pay $280 per share in cash for Actelion – a 23% premium to Actelion’s closing share price yesterday – as well as shares in the spin-off, and values the company at around $30bn. J&J will hold a 16% stake in the spin-off company with an option on another 16% through a convertible note.
The terms allow Actelion’s fiercely independent founder and CEO Jan-Paul Clozel to head up an unnamed Switzerland-based company and retain control of Actelion’s early-stage pipeline, backed by a warchest of CHF 1bn (around $1bn).
Meanwhile, J&J claims the company’s marketed products including its trio of pulmonary artery hypertension (PAH) drugs, including Tracleer (bosentan) – now facing generic competition – as well as follow-up drugs Opsumit (macitentan) and Uptravi (selexipag). The two newer products are predicted to bring in combined sales of $4bn-plus by 2020.
J&J also takes control of Actelion’s late-stage pipeline, including multiple sclerosis candidate ponesimod and cadazolid for diarrhoeal disease, and the US group has also taken an option on ACT-132577, an Actelion candidate for resistant hypertension that is currently in phase II clinical development.
The transaction – which some analysts have suggested is fairly pricey given that J&J will only end up with a minority stake in the R&D pipeline – the is expected to close by the end of the second quarter.
News of the deal came just after J&J reported its fourth-quarter results, with revenues coming in below estimates thanks in part to slipping sales of top-selling product immunology drug Remicade (infliximab), down 3% in the fourth quarter following the onset of biosimilar competition.
Analysts at Jefferies have said they do not expect any other drugmaker to come in with a counter offer for Actelion.
Clozel will be CEO at the new spin-off, while Actelion’s chairman Jean Pierre Garnier will take the same role at the firm. It has been suggested that Clozel’s desire to retain control of some key candidates in Actelion’s pipeline could have played a role in the breakdown of talks with Sanofi last year.
“The newly created R&D company allows us to continue with our successful culture of innovation,” said Clozel. “It is enormously exciting to continue to develop new and differentiated products, in multiple therapeutic areas, to improve the lives of patients.”