J&J to buy Swiss drugmaker Actelion for US$30b, its largest deal ever

Johnson & Johnson agreed to buy Actelion for US$30 billion (S$42.52 billion).
Johnson & Johnson agreed to buy Actelion for US$30 billion (S$42.52 billion). PHOTO: REUTERS

NEW YORK/BERLIN (BLOOMBERG) - Johnson & Johnson agreed to buy Actelion for US$30 billion (S$42.52 billion) and spin off the Swiss drugmaker's research and development operations, clinching its largest deal 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 Actelion for US$280 each in cash, the companies said in a statement on Thursday (Jan 26). The price, which equals 280.08 Swiss francs, is 23 per cent 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 pe rcent stake.

The deal caps weeks of discussions interrupted for several days after 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.

Shares of Actelion closed on Wednesday at 227.40 Swiss francs, after having climbed 68 per cent since early November. J&J ended at US$112.80 in New York, capping a 11.5 per cent increase in the past year. Meanwhile, Sanofi is left empty-handed for the second time after losing out on cancer treatment maker Medivation to another US giant, Pfizer, 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. 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.

Clozel will now lead the new R&D company as CEO, while Actelion Chairman Jean Pierre Garnier heading the board. Shares in the business, which will be listed on the Six Swiss exchange, will be distributed to shareholders as a dividend. As part of the deal, J&J will have rights to an additional 16 per cent of the business through a convertible note, as well as an option on ACT-132577, a product being developed for resistant hypertension.

The new deal will immediately start adding to J&J's earnings when the transaction in completed by the end of the second quarter, the companies said. The US behemoth expects the transaction to boost its long-term profit growth by as much as 2 per cent over analysts' expectations.