Johnson & Johnson and Actelion in Merger Talks

29.11.2016 -

Major US healthcare company Johnson & Johnson (J&J) is holding preliminary talks with Swiss pharmaceuticals and biotechnology firm Actelion about a potential takeover. An acquisition of the Allschwil-headquartered group, currently valued at around $20 billion, would boost J&J’s drugs pipeline and diversify its portfolio.Actelion confirmed on Nov. 25 that it had been approached by the New-Jersey headquartered group about a possible transaction, but added there was “no certainty that a transaction will result.” The company is reported to be working with an adviser to explore options.

Sources close to the matter told news agencies that Actelion may also attract other suitors, such as Novartis and Sanofi. Both of the European drugmakers have declined to comment. Two of Actelion’s new drugs for treating pulmonary arterial hypertension – Opsumit and Uptravi – are expected to become blockbusters over the next three years, potentially generating more than $4.6 billion in combined sales by 2020. Its other blockbuster treatment for pulmonary arterial hypertension – Tracleer - has lost patent protection, and analysts say sales could start to plummet when cheaper generic versions are introduced in the first quarter of 2017.

For the longer term, Actelion is developing experimental drugs for insomnia, lupus and multiple sclerosis. J&J’s biggest drug, arthritis medication Remicade, which generated revenue of $6.6 billion last year, is projected to decline as it faces competition from biosimilars. Rival US drugmaker Pfizer launched its own version - Inflectra - on Nov. 21, although both companies are currently in a legal battle over the validity of J&J’s original patent.

A federal judge ruled in August that J&J’s patent was invalid but the healthcare group has appealed. If Pfizer loses the case, it would face substantial financial penalties from making an “at-risk” launch of Inflectra. Actelion, one of the few mid-sized pharmaceutical companies left in Europe, has been viewed as a potential takeover target for several years. CEO and co-founder, Jean-Paul Clozel, has previously said the company plans to remain independent. However, sources have said he may now be more accepting of a sale at a sufficient premium.

The company had sales of 2 billion Swiss francs in 2015 and employs about 2,500 people.