Following a month-long take-over poker, J&J’s and Actelion’s boards have agreed to support an all-cash tender offer from J&J in which shareholders are set to receive US$280.08 per share and one share of NewCo, an R&D spin out to be led by Actelion CEO Paul Clozel. J&J will acquire at least 67% of Actelion’s shares and will hold 16% of NewCo with an option to further 16%.
It’s one of the biggest pharma-biotech deals ever, and for Actelion, which made profits of approx. US$500m with its drug franchise of pulmonary arterial hypertension (PAH) meds, it’s a good deal. Before the take-over poker begun in April 2016, Actelion shares stood at US$135. After Sanofi had entered negotiations, J&J re-entered talks and in the second run pays a 20% premium on Actelion’s last share value. Johnson & Johnson will fund the transaction with cash held outside the United States.
As part of the transaction, expected to be closed by the end of Q2/2017, Actelion will spin out its drug discovery operations and early-stage clinical development assets into a newly created Swiss biopharmaceutical company (“R&D NewCo”). The shares of R&D NewCo, which will be listed on the SIX Swiss Exchange (SIX), will be distributed to Actelion’s shareholders as a stock dividend upon closing of the tender. Johnson & Johnson will initially hold 16% of the shares of R&D NewCo and have rights to an additional 16% of R&D NewCo equity through a convertible note. Johnson & Johnson will also receive an option on ACT-132577, a product within R&D NewCo being developed for resistant hypertension currently in phase 2 clinical development. R&D NewCo will have a broad portfolio of drug candidates in clinical development, across four therapeutic areas: specialty cardiovascular disorders, central nervous system disorders, immunological disorders and orphan diseases.
“Actelion has built an attractive, growing business with world-class commercial and clinical development capabilities,” said Alex Gorsky, J&J Chairman and CEO. “We expect to leverage our established global presence and commercial strength to accelerate growth and patient access to these important therapies,” he added. Actelion's PAH franchise is complementary to Janssen Pharmaceuticals’ drug portfolio. It includes Actelion’s novel PAH drugs Opsumit and Uptravi, which analysts expect to peak at US$4.6bn in 2020. In January, however, Opsumit failed in clinical trails to show significant benefit to PAH patients with congential heart failure. Furthermore, Actelion’s PAH franchise include Tracleer, Veletri and Ventavis.
Through the transaction, J&J is going to acquire further marketed products, including Valchlor, a treatment for Stage IA & IB mycosis fungoides–type cutaneous t-cell lymphoma, and Zavesca, which is indicated as monotherapy for the treatment of adult patients with mild to moderate type 1 Gaucher disease for whom enzyme replacement therapy is not a therapeutic option. Furthermore, J&J will acquire global rights to ponesimod, an S1P1 receptor modulator in Phase III development for multiple sclerosis, and cadazolid, a novel antibiotic also in Phase 3 development for Clostridium difficile-associated diarrhea.