January 5, 2016
By Alex Keown, BioSpace.com Breaking News Staff
NEW BRUNSWICK, N.J. – Johnson & Johnson is allegedly looking to divest itself of its Athens, Ga.-based subsidiary, Noramco, a manufacturer of active pharmaceutical ingredients, for up to $800 million, Reuters reported Monday night.
Reuters cited “people familiar with the matter,” but neither they, nor Johnson & Johnson will provide specifics to the alleged deal. Reuters said its sources said Noramco is attracting prospective buyers, primarily from buyout firms.
Noramco manufactures the active ingredients in painkillers, including oxycodone and hydrocodone, Reuters noted. There was no information provided as to why Johnson & Johnson would look to unload the company.
Oxycodone is an effective, but addictive treatment for pain. Several companies are developing alternatives to the traditional opiate-based treatment, including New York-based Nektar Therapeutics . Nektar has its own experimental chronic-pain treatment, NKTR-181, a new opiod molecule that has a low abuse liability due to its extended release time. NKTR-181 has a peak release time of about three hours, a much slower release time than oxycodone, which has a release time of about 11 minutes. The slower release time is considered safer and will have a lower potential for abuse, Nektar told BioSpace in a previous interview.
In addition to the ingredients for pain killers, Noramco is also developing a line of bio-absorbable hemostat cloths designed to stop bleeding during surgery.
In April 2015, Noramco earned the distinction of being the manufacturer of the year in Athens due to its economic impact on the region as well as the number of employees who volunteer throughout the community. Online Athens reported the company has a total economic impact of about $20 million annually in the region and has a total value of approximately $70 million.
The company, which operates a 183,000 square-foot facility in Georgia, employs approximately 220 individuals and runs four shifts daily.
Johnson & Johnson, a highly diversified healthcare products company, has been making a number of collaborative moves with other large companies, including a new venture with Google’s life sciences spinoff Verily Life Sciences to create an independent surgical solutions company, Verb Surgical Inc. In March 2015, JNJ’s Ethicon, Inc. , a medical devices company, announced a strategic collaboration with Google Life Sciences. The focus of that collaboration was to develop robotic surgery platforms that integrated advanced technologies. The new company, Verb, will do the same thing.
Johnson & Johnson’s subsidiary Janssen Inc. has developed a number of business incubators across the United States and in Canada to help launch new companies. JLABS, the incubator, is part of Johnson & Johnson’s external R&D arm. The program provides a “capital-efficient, resource-rich environment where emerging companies can transform the scientific discoveries of today into the breakthrough healthcare products of tomorrow,” according to the JLABS website. JLABS is a “no strings attached” model, which means that startups setting up shop in the JLABS facilities do not automatically give away any rights or ownership stake to Janssen .
Additionally, Johnson & Johnson announced a new $23.5 million North American shared services headquarters in Tampa, Fla. In August. The new facility is expected to open later this year and will attract 500 new jobs.
