It took a while, but Johnson & Johnson (NYSE: JNJ) finally bagged Swiss-based Actelion Ltd. (SIX: ATLN), Europe’s biggest biotech company. The company had been in play since August 2016, when J&J began negotiations, but eventually bowed out after offering $260 per share, or $28 billion.
Sanofi S.A. (NYSE: SNY) moved in and by mid-December, Bloomberg reported, the two parties were discussing a price of $275 per share, valuing Actelion at $29.6 billion.
For both suitors, a deal with Actelion would boost their aging pipelines. Actelion, which was formed in 1997 as a spin-out from Roche (SIX: RO), had developed a strong portfolio of drugs for pulmonary arterial hypertension, a rare respiratory disease, as well as several clinical-stage offerings for multiple sclerosis and hypertenstion. Sanofi faces diminishing profits associated with its best-selling insulin, Lantus.
For J&J, the deal would significantly boost sales, as its blockbuster therapy Remicade is facing competition from Pfizer‘s (NYSE: PFE) Inflectra.
The final price tag was $280 per share (CHF 280.08) in cash, or nearly $30.2 billion. J&J will use cash stashed outside the United States to fund this transaction.
There’s a twist to this deal, however. Immediately prior to closing, Actelion will spin out its R&D unit into a standalone company (“New R&D Company”), which will be led by Actelion CEO and co-founder Jean-Paul Clozel. J&J will have a 16% minority interest with an option to acquire another 16% at a later date.
And if New R&D Company, which retains Actelion’s drug-discovery team, is at all successful, Sanofi and others will be knocking on the door again.
