Johnson & Johnson to buy Actelion for $43b

Pharmaceutical company Actelion's Swiss headquarters. Access to its research and development operations and its pulmonary arterial hypertension drugs will help Johnson & Johnson expand beyond autoimmune, heart and cancer drugs.
Pharmaceutical company Actelion's Swiss headquarters. Access to its research and development operations and its pulmonary arterial hypertension drugs will help Johnson & Johnson expand beyond autoimmune, heart and cancer drugs.PHOTO: REUTERS

NEW YORK • Johnson & Johnson has agreed to buy Actelion for US$30 billion (S$42.5 billion) and spin off the Swiss drugmaker's research and development (R&D) operations, clinching its largest deal to become a leader in medicine treating a rare type of high blood pressure.

With the purchase, J&J - the world's biggest maker of healthcare products - is fulfilling its goal of adding a new drug category and dealing a blow to France's Sanofi, which 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. 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 per cent 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 to expand beyond autoimmune, heart and cancer drugs.

Actelion shares closed on Wednesday at 227.40 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 last year.

Meanwhile, Sanofi is left empty- handed for the second time after losing out on cancer treatment manufacturer Medivation to another United States giant, Pfizer, in August.

Actelion was founded 20 years ago by chief executive officer Jean-Paul Clozel, his wife Martine and a team of scientists who split from Roche Holding. The discovery of the blockbuster Tracleer propelled it more than a decade ago to becoming a leader in the treatment of pulmonary arterial hypertension.

Mr Clozel will lead the new R&D company as CEO, with 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.

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A version of this article appeared in the print edition of The Straits Times on January 27, 2017, with the headline 'Johnson & Johnson to buy Actelion for $43b'. Print Edition | Subscribe