Johnson & Johnson in talks to buy commercial portfolio of Actelion

30 Dec 2016

Johnson & Johnson (J&J) negotiating a deal to buy the commercial portfolio of Actelion Ltd by separating the Swiss biotechnology company's research and development assets, Reuters yesterday reported, citing people familiar with the matter.

Under the proposed deal, J&J will acquire Actelion's commercial portfolio for around $260 per share in cash, and would allow Actelion shareholders to benefit financially from Actelion's R&D pipeline, the report said.

Early this week, the two companies confirmed media reports that they had resumed talks, which had broken down just a week ago over disagreement on price, (See: Actelion in exclusive negotiations with J&J after talks with Sanofi)  with the media reporting that French drug giant Sanofi was in advance talks with Actelion on a potential deal. Under the current deal being discussed, Actelion's R&D pipeline would be placed in a new publicly-traded company, but whether Actelion CEO Jean-Paul Clozel would head it, are among the details still being negotiated, the report said.

J&J had in late November offered to buy the whole of Actelion for about $26 billion and was reported to have raised its offer to over $27 billion, but J&J walked away from the deal as Actelion said that even the raised offer was too low.

Founded in 1997, Actelion is Europe's biggest biotech firm with 30 affiliates around the world, including the US, Canada, Brazil, Australia, Japan, Switzerland and a number of EU countries. Run by its founder and CEO Clozel, the company has three main units - consumer, medical devices and pharmaceuticals.

Actelion is focused on the discovery, development and commercialisation of innovative drugs for diseases with significant unmet medical needs.

Its portfolio of drugs includes Tracleer, an oral endothelin receptor antagonist, the first oral treatment approved for pulmonary arterial hypertension; Veletri, an intravenous prostacyclin, which removes the need for patients to carry ice packs; Opsumit, an oral endothelin receptor antagonist; Uptravi, the only approved oral, selective IP receptor agonist targeting the prostacyclin pathway in pulmonary arterial hypertension and Ventavis, an inhaled formulation of iloprost.

Actelion was initially financed with venture capital provided through a syndicate including Atlas Venture, Sofinnova and HealthCap.

The Swiss stock exchange-listed company has a market cap of $23.5-billion and annual revenues of $1.7 billion.

Actelion has recently introduced two new lung medicines Opsumit and Uptravi that are poised to become blockbusters over the next three years. Both drugs are on track to reach approximately $2 billion each in peak annual sales, according to Wall Street analysts.

These two drugs will reduce dependence on Tracleer since it is expected to face generic competition in 2017. Tracleer currently rakes in nearly $1 billion or around 46 per cent of its annual sales.

The company is also counting on Opsumit and Uptravi, which combined are forecast to bring in nearly 4.5 billion francs in annual sales by 2020, according to Reuters data.