Johnson & Johnson (NYSE: JNJ) made a splash in the healthcare M&A market last week with its acquisition of Momenta Pharmaceuticals, Inc. (NASDAQ: MNTA). The global pharmaceutical giant announced on August 19 it is paying $6.5 billion in cash, or $52.50 per share, for Momenta, a 70.4% premium over Momenta’s August 18 closing price. Momenta reported a trailing 12-month revenue of $30.07 million. On the day of the announcement, Momenta’s share price jumped 69%.
This acquisition provides an opportunity for the Janssen Pharmaceutical Companies of JNJ to broaden its market reach in immune-mediated diseases and drive further growth through expansion into autoantibody-driven disease. The transaction includes full global rights to nipocalimab, a clinically validated, anti-FcRn antibody that has indications across many autoimmune diseases with substantial unmet medical need in maternal-fetal disorders, neuro-inflammatory disorders, rheumatology, dermatology and autoimmune hematology.
With the nipocalimab platform, JNJ will have the potential to introduce multiple product launches, many as first-in-class indications with potential for significant peak year sales, some of which could exceed $1 billion, supporting Janssen’s goal of continuing to deliver above-market performance over the long term. JNJ will maintain Momenta’s presence in Cambridge, Massachusetts to increase its footprint and capabilities in the Boston area.
An estimated 2.5 percent of the population, or approximately 195 million people worldwide, suffer from some form of autoantibody-driven disease, many of which are orphan and rare diseases.
JNJ hasn’t been active on the M&A front lately, according to Deal Search Online. The company announced two small deals in December 2019; it acquired Verb Surgical Inc., a medical device firm, and Taris Biomedical LLC, a biotechnology company. In February 2019, JNJ purchased Auris Health, Inc. for $3.4 billion to accelerate its entry into robotic technologies for surgery.
For 2020, the company has been preoccupied with COVID-19 vaccine research. Earlier this month, the company announced a $1 billion agreement with the U.S. government for 100 Million doses of investigational COVID-19 vaccine. Its second-quarter results weren’t so hot, however. Sales declined by 10.8% for JNJ in Q2:20 compared with Q2:19, primarily driven by the impact of the pandemic.