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(Bloomberg Gadfly) -- If you can have your cake and eat it, why wouldn't you? That may be what Johnson & Johnson has to offer the managers of the Swiss biotech Actelion Ltd. to get some kind of deal done. The target is reportedly more open to merging some assets in return for a stake than being taken over outright. Actelion's managers would get the benefits of a tie-up while staying independent. What's in it for J&J is less clear.

Actelion R&D spending

23% of sales

Investors have certainly been hoping to see J&J pull off a clean purchase of Actelion, pushing the shares up as much as 27 percent after the U.S. approach emerged on Nov. 25. The snag is that J&J would want the Actelion board to agree to any deal rather than risk a brain drain by going hostile. With the Swiss company's CEO Jean-Paul Clozel talking about taking Actelion to "another level" over the coming years, such agreement may be expensive.

Another option would be for J&J to settle for a partnership rather than a takeover, the Financial Times reported on Monday. It's easy to see the attraction for Actelion. The group would benefit from added financial resources and perhaps gain some early-stage compounds to work on. It's currently spending around 500 million Swiss francs ($492 million), or 23 percent of sales, on R&D annually, according to research by Barclays. That could come under strain.

Actelion has only about 400 million Swiss francs of net cash. That limits its ability to buy new drugs or other companies. Clozel considered the acquisition of ZS Pharma in 2015 but withdrew during due diligence. ZS was subsequently acquired by AstraZeneca for $2.3 billion.

The size of any stake J&J received in return would depend on the value of what it put in. But if the goal is to avoid a change of control, this would have to be less than 50 percent. A partnership would therefore be a wager that Clozel and his team could do more with J&J's cash and assets than J&J's own managers. That's quite a bet. While Actelion has ambitions in multiple sclerosis and cardiovascular treatments, it is for now a specialist in just one area.

True, there might be some tax savings given Actelion's Swiss base and 12 percent effective tax rate. But Actelion's tax charge will probably rise as sales of new products pick up in the U.S., and J&J's own tax rate is only 19 percent. The financial savings don't justify a deal.

Actelion shareholders would benefit from all this if the group enjoyed more success as a result. But J&J's involvement would be an effective block on a takeover by anyone else.

Big pharma is no stranger to biotech partnerships. Sanofi has a 23 percent stake in Regeneron Pharmaceuticals and works jointly in immuno-oncology. Roche Holding AG bought a stake in oncology specialist Genentech in 1990 for $2.1 billion and acquired the rest for some $44 billion in 2009. Genentech provided three of Roche's top drugs. But such partnerships usually come about when there's no other way.

Perhaps that's the case here. But J&J would need to be certain that Clozel can run its assets and cash better than it can itself.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story: Chris Hughes in London at chughes89@bloomberg.net.

To contact the editor responsible for this story: James Boxell at jboxell@bloomberg.net.

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