December 6, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Johnson & Johnson ’s bid to acquire Switzerland-based Actelion Pharmaceuticals just got more complicated, as Paris-based Sanofi may have joined the bidding.
On November 28, there were reports that J&J was in talks to acquire Actelion. Reportedly the deal was a complicated, structured transaction that would allow Actelion to remain independent.
Actelion focuses on rare diseases, with a particular emphasis on pulmonary arterial hypertension (PAH), a form of high blood pressure that affects arteries in the lungs. About half of the company’s revenue comes from sales of Tracleer, for PAH. It also has two new drugs, Opsumit and Uptravi, both for PAH, and are likely to replace Tracleer, which will face generic competition in early 20107.
Sources indicate that the two companies are discussing a deal where J&J would essentially create a biotech company that unites Actelion with relevant parts of its own pharmaceutical business. J&J would be a major shareholder in this new entity, and would probably invest into the deal as well.
BloombergMarkets reported late yesterday that Sanofi may make a counterbid. Sources told Bloomberg that Sanofi is working with advisers on its options. Apparently Sanofi has informed Actelion that it is interested, but has not made a final decision on whether to continue with the bid.
On its part, J&J hopes to have a deal before Christmas. On Friday, J&J upped its offer above $250 a share. That would give Actelion a market value of more than $27 billion.
Actelion’s chief executive officer and founder, Jean-Paul Clozel, has repeatedly said he wants his company to stay independent. The deal under discussion seems to benefit Actelion, but it’s not clear to what extent it would benefit J&J, which as the deal has been described to date, would require it to give up some of its assets.
In a note to clients last week, analysts with JP Morgan Cazenove wrote, “With J&J having a market cap exceeding $300 billion, Actelion would clearly be an affordable asset for the company. Less clear to us is the logic of the timing, ahead of a likely favorable ex-U.S. cash repatriation window for U.S. corporates. We also see little in the way of obvious therapeutic overlap to allow synergies, beyond J&J’s interest in the Xarelto anti-coagulant which could have some modest overlaps with cardiologists prescribing PAH therapies.”
Bloomberg notes that “advisers seeking work with prospective buyers have reached out to other drugmakers.” Those include Roche and Pfizer to see if they might be interested. In an interview Sunday in SonntagsBlick newspaper, Joe Jiminez, the chief executive officer of Novartis , said that he was not interested in Actelion because Novartis’ plans are for acquisitions less than $5 billion. And at least one source has indicated that Novartis is not impressed with Actelion’s pipeline.
There is some connection between Actelion and Roche. Clozen was a Roche executive prior to founding Actelion with his wife, Martine, and Walter Fischli, Thomas Widmann and Andre Mueller in 1997.
And Eric Le Berrigaud, an analyst with Bryan Garnier & CO. in Paris, told BloombergMarkets recently that Sanofi would be a good fit with Actelion.
Actelion is currently trading for $207.
