J&J to Buy Actelion for $30 Billion, Spin Off Research Operation


 Bloomberg

(Bloomberg) -- Johnson & Johnson agreed to buy Actelion Ltd. for $30 billion and spin off the Swiss drugmaker’s research and development operations, clinching one of its largest deals ever to become a leader in medicines treating a rare type of high blood pressure.

With the purchase, J&J, already the world’s biggest maker of health-care products, is fulfilling its goal of adding a new drug category and dealing a blow to France’s Sanofi, which had also sought to acquire Actelion.

J&J will begin a tender offer to buy shares of Allschwil, Switzerland-based Actelion for $280 each in cash, the companies said in a statement. The price, which equals 280.08 Swiss francs, is 23 percent above Wednesday’s closing level. The R&D operations will be spun off to Actelion shareholders as a new publicly traded company, with J&J keeping a 16 percent stake.

The deal caps weeks of discussions interrupted for several days after New Brunswick, New Jersey-based J&J walked away on Dec. 13, only to return to the negotiating table about a week later. Access to Actelion’s drugs Tracleer, Opsumit and Uptravi, which all treat life-threatening pulmonary arterial hypertension, will make J&J a leader in the disease and help it expand beyond autoimmune, heart and cancer drugs.

Meanwhile, Sanofi is left empty-handed for the second time after losing out on cancer treatment maker Medivation Inc. to another U.S. giant, Pfizer Inc., in August. 

Actelion was founded 20 years ago 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. Uptravi and Opsumit followed and are set to replace Tracleer, which has lost patent protection and faces challenges from copycat drugs.

Clozel, who is among Actelion’s largest shareholders, had said in the past he wanted the company to remain independent. The CEO is a believer in Actelion’s pipeline of experimental medicines, and he and his wife have resisted takeover bids over the years.

Before walking away, J&J had made Actelion an offer that it later increased to about $260 a share, people familiar with the situation have said, valuing the Swiss biotech at about $28 billion. Paris-based Sanofi entered with its own proposal of about $275 a share, which included a so-called contingent value right, or CVR, for Actelion stockholders that would pay out depending on the performance of certain pipeline drugs, according to people familiar with the offer. Those talks faltered amid complications over the CVR, the people said.

Lazard is lead financial adviser to Johnson & Johnson with Citibank also providing advice. Cravath, Swaine & Moore LLP, Homburger AG and SextonRiley LLP are J&J’s legal advisers.Bank of America Merrill Lynch is Actelion’s lead adviser, with Credit Suisse also providing advice. Niederer Kraft & Frey, Wachtell Lipton, Rosen & Katz, and Slaughter & May are legal advisers to Actelion.

To contact the reporters on this story: Jared S. Hopkins in New York at jhopkins38@bloomberg.net, Johannes Koch in Berlin at jkoch34@bloomberg.net. To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Chitra Somayaji at csomayaji@bloomberg.net, Phil Serafino, Tara Patel

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