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Bloomberg
Johnson & Johnson made its biggest deal ever in a bold bet that it can get more growth out of medicines for a rare type of high blood pressure.
The $30 billion purchase of Swiss drugmaker Actelion Ltd., which J&J is funding with cash it holds outside the US, will fulfill its goal of gaining a new drug category and immediately boost earnings. The deal, including a spinoff of Actelion’s research and development, is expensive compared with recent industry takeovers such as Pfizer Inc.’s acquisition of Medivation Inc. and AbbVie Inc.’s purchase of Pharmacyclics Inc., according to an analysis from Bloomberg Intelligence.
But J&J says it sees upside in Actelion’s drugs that analysts haven’t factored in yet — a way to boost their sales by broadening their indications and getting better reimbursement.
“We’re going to be able to apply considerably more global, clinical development, regulatory, commercial, reimbursement resources, to take the very strong foundation that Actelion has built, demonstrating 20 percent plus growth rates, and really take that to the next level,†Chief Executive Officer Alex Gorsky said on a conference call with analysts.
The agreement caps two months of stuttering negotiations to find a deal structure palatable to Jean-Paul and Martine Clozel, Actelion’s founders.