J&J to Purchase Antibody-Drug Conjugate Company Ambrx for $2 Billion

J&J

Pictured: A Johnson & Johnson sign in front of an office building/iStock, JHVEPhoto

A late 2023-turnaround for the biotech sector is continuing into the new year. Johnson & Johnson announced Monday it had agreed to purchase Ambrx, a drug developer working on antibody-drug conjugates (ADCs), which have been making a big splash in the industry lately.

The deal will see J&J purchase Ambrx for $28 a share, for a total of roughly $2 billion, a figure J&J said represented “an approximately 105% premium to Ambrx’s closing stock price on January 5, 2024.”

Ambrx is focused on ADCs, a class of drug that have been making big waves in cancer treatment. Unlike conventional therapies such as chemotherapy that kill healthy and cancerous tissues alike, ADCs are targeted treatments designed to only kill tumors.

Ambrx CEO Daniel O’Connor said in the release that this deal will “continue to advance our leading prostate cancer candidate and Ambrx’s promising pipeline, while delivering significant and certain cash value to our shareholders.”

The release also noted that “Johnson & Johnson scientists intend to work with Ambrx researchers, accelerating the Phase 1/2 APEX-01 study (NCT04662580) of ARX517 in advanced prostate cancer, while progressing a pipeline of novel product candidates.”

Its not J&J’s first moves in the ADC space. In early 2022, the Janssen unit of J&J paid $40 million upfront and more than $1 billion in biobucks for a collaboration designed to produce proprietary antibodies with Mersana Therapeutics, leveraging its Dolasynthen platform. And late last month, J&J bought licensing rights for LegoChem Biosciences ADC for $100 million upfront, with $1.7 billion available in potential milestones.

This latest deal represents just the latest in a flood of late 2023 ADC-focused deals that have reinvigorated the biotech sector, according to a report from J.P. Morgan. The fourth quarter of last year saw no less than 108 licensing partnership deals worth $63 billion. Over $30 billion of that is wrapped up in ADC deals: Merck inked a deal worth up to $22 billion with Daichii Sankyo to help it develop its three ADC candidates; and Bristol Myers Squibb signed a deal worth up to $8.4 billion with SystImmune to co-develop and co-market BLBO1D1.

Also worth noting are a few acquisitions, such as AbbVie’s purchase of ADC-developer ImmunoGen for $10 billion in cash in November, and Pfizer completing its $43 billion purchase of Seagen, “one of the largest acquisitions in Pfizer’s history,” the company said in a release. CEO Albert Bourla noted as well that Seagen’s industry-leading ADC technology “together with the scale and strength of Pfizer’s capabilities and expertise, we are poised to change the cancer treatment paradigm.”

Connor Lynch is a freelance writer based in Ottawa, Canada. Reach him at lynchjourno@gmail.com.

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