Johnson & Johnson approaches Actelion about takeover deal

Fri Nov 25, 2016 7:03pm EST
 
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By Paul Arnold and Ludwig Burger

ZURICH/FRANKFURT (Reuters) - U.S. healthcare company Johnson & Johnson (JNJ.N: Quote) said on Friday it was in preliminary talks with Actelion (ATLN.S: Quote) about a potential takeover of Europe's largest biotech firm, currently valued at about $20 billion.

Lung disease specialist Actelion confirmed it had been approached and said there was no certainty a deal would occur.

An acquisition of the Swiss company would boosts J&J's drug pipeline and diversify its prospects. J&J's biggest product, the arthritis drug Remicade, faces cheaper competition from Pfizer Inc (PFE.N: Quote).

Actelion shares surged nearly 19 percent to a peak of 187.70 Swiss francs on Friday, valuing the company at around $20 billion. They closed up 16.8 percent at 184.50 Swiss francs, more than matching the stock's total gains this year up to Thursday's close.

The company's focus on rare diseases makes it an attractive takeover target because drugs in that area are less prone to pricing pressure.

Analysts at Bank of America Merrill Lynch and Bryan Garnier said a bid for Actelion could be worth up to 220 Swiss francs ($217) or 250 Swiss francs ($246) per share, respectively, stoked by appetite in the industry for fast-growing businesses.

Actelion's Opsumit and Uptravi drugs to treat the life-threatening condition of high pressure in blood vessels to the lungs will generate more than $4.6 billion in combined 2020 sales, analysts forecast, up from an estimated $1.4 billion this year.

J&J's shares finished up nearly 1 percent at $114.13.   Continued...

 
A general view shows Swiss biotech group Actelion Headquarters in Allschwil near Basel February 17, 2015.    REUTERS/Arnd Wiegmann