Johnson & Johnson to make takeover approach for drugmaker Actelion

Deliberations are still at an early stage following Johnson & Johnson’s initial offer, people familiar with the matter said


A file photo of the Johnson & Johnson building. Photo: Wikimedia
A file photo of the Johnson & Johnson building. Photo: Wikimedia

London/New York: The Johnson & Johnson has approached Actelion Ltd about a potential takeover of the $17 billion Swiss drugmaker as the US health-care giant works to expand its pharmaceutical lineup, people familiar with the matter said.

Deliberations are still at an early stage following J&J’s initial offer, the people said, asking not to be identified because the talks are private. Actelion is working with an adviser to explore options, and any discussions may not lead to a transaction, the people said.

Shares of Actelion jumped by the most in more than two years. While Actelion, Europe’s largest biotech firm, has been named as a potential takeover target for years, chief executive officer and co-founder Jean-Paul Clozel has previously said the company planned to remain independent. The 61-year-old, who is one of Actelion’s largest shareholders, may now be more open to entertaining a sale at a sufficient premium, one of the people said.

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An acquisition would add to the $246 billion of pharmaceutical deals announced this year, data compiled by Bloomberg show. Representatives for J&J and Allschwil, Switzerland-based Actelion declined to comment.

Lung medicines

Actelion gained 9.8%, the most since June 2014, to 173.50 Swiss francs as of 9:10 am on Friday. The shares had previously risen 13% this year, valuing it at almost $17 billion. New Brunswick, New Jersey-based J&J, with a market capitalization of about $308 billion, has risen 10% this year.

J&J chief financial officer Dominic Caruso has said he would consider deals of any size that fit into the strategy of building up its three main businesses—consumer, medical devices and pharmaceuticals. The company agreed to buy the eye-surgery equipment unit of Abbott Laboratories for $4.33 billion in September.

Actelion has brought to market two new lung medicines that are poised to become blockbusters over the next three years. That will reduce dependence on Tracleer, a medicine to treat a type of high blood pressure that affects arteries in the lungs, which accounted for more than half its revenue last year.

Sales of Tracleer may plummet following the introduction of cheaper copycats in the first quarter of 2017. Meanwhile, revenue from Opsumit is projected to surpass $1 billion next year, while Uptravi is forecast to cross that threshold in 2019, according to analysts surveyed by Bloomberg. For the longer term, the company is also developing experimental drugs for insomnia, lupus and multiple sclerosis. Bloomberg

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