Battle for Actelion: Sanofi is Out, Johnson & Johnson is Back In
December 22, 2016
By Mark Terry, BioSpace.com Breaking News Staff
The end of the year appears to have at least one more unpredictable story—who’s going to buy Swiss-based Actelion Pharmaceuticals ?
First, U.S.-based Johnson & Johnson was reported to be in talks to buy Actelion at the end of November. Then it was reported that the company had walked away from the deal, supposedly over price.
Then it was reported that Paris-based Sanofi was in talks to acquire the company.
Today, both Actelion and J&J officially announced that they are in talks about a possible “strategic transaction.” It’s currently unknown if Sanofi is still in the running.
Actelion focuses on rare drugs. It recently brought two new drugs on the market, both of which have the potential to become blockbusters over the next two or three years. About half of its revenue comes from sales of Tracleer, used to treat a form of high blood pressure that affects arteries in the lungs, pulmonary arterial hypertension (PAH). That drug is facing generic competition at the beginning of 2017.
The two new drugs are Opsumit and Uptravi. Opsumit is used to treat PAH, and is likely to replace Tracleer. Uptravi is also used to treat PAH.
Actelion has been considered an acquisition target for some time, but the company’s co-founder and chief executive officer, Jean-Paul Clozel, has repeatedly expressed the desire to stay independent.
Just yesterday, it was reported that J&J had abandoned the deal and Sanofi was in talks to acquire the company. J&J was believed to have balked at Actelion’s asking price. J&J supposedly offered $260 per share, or more than $28 billion, but Actelion was looking for as much as $285 per share. The deal was also believed to have a complicated structure, with J&J creating a biotech company that tied Actelion to relevant parts of its own pharmaceutical business. Because it would have required J&J to give up control of some of its assets, many analysts were skeptical about the likelihood of the deal.
On the part of Sanofi, inside sources indicated that a deal might involve a contingent value right, or CVR. A CVR allows a buyer to agree to a base price with an additional amount tacked on only if specific pipeline drugs meet various milestones. In the case of Sanofi and Actelion, those sources were claiming there were discussions of a CVR of about $20 as part of the $275 per share being negotiated.
The statement by Actelion and J&J is a tersely worded, “Actelion has entered into exclusive negotiations with Johnson & Johnson regarding a possible strategic transaction. There can be no assurance any transaction will result from these discussions. Actelion does not intend to make any additional comments regarding these discussions unless and until it is appropriate to do so, or a formal agreement has been reached.”
Although there is clearly no solid information, many investors think a deal for around $30 billion, probably with a CVR, is under discussion. But whether J&J is offering a CVR is completely unknown at this point.
At the very least, if J&J were to come back into the mix and scoop up Actelion, it would be another disappointing embarrassment for Sanofi. In August, after a lengthy hostile takeover attempt to acquire San Francisco’s Medivation , Sanofi was beaten to the punch at the last minute by Pfizer , which bought Medivation for about $14 billion.
“J&J, of all the big pharmas, is the best one for Actelion,” John Rountree, managing partner at Novasecta, a pharma consulting firm in London, told BloombergMarkets. “They perhaps might be more hands off than some other potential acquirers.”