Johnson & Johnson, which in September agreed to acquire Abbott Medical Optics for $4.325 billion in cash, announced that it has agreed to acquired Actelion for $280 per share in cash, or $30 billion, under a deal that will include the spin out of the Swiss drugmaker's R&D unit into a standalone company (R&D NewCo). Actelion has established a leading franchise of differentiated products for pulmonary arterial hypertension (PAH).
The transaction represents a premium of 23 percent to Actelion's closing share price on January 25 and has been unanimously approved by the boards of both companies. The deal is expected to close by the end of the second quarter.
"We believe this transaction offers compelling value to both Johnson & Johnson and Actelion shareholders," Alex Gorsky, Chairman and Chief Executive Officer of Johnson & Johnson, said in a news release. "Actelion has built an attractive, growing business with world-class commercial and clinical development capabilities. Adding Actelion's portfolio to our already strong Janssen Pharmaceuticals business is a unique opportunity for us to expand our portfolio with leading, differentiated in-market medicines and promising late-stage products. We expect to leverage our established global presence and commercial strength to accelerate growth and patient access to these important therapies. Further, we believe R&D NewCo will be strongly positioned to continue Actelion's legacy of innovation and look forward to collaborating on the development of cutting-edge new therapies."
The transaction is expected to be immediately accretive to Johnson & Johnson earnings per share and accelerate Johnson & Johnson revenue and earnings growth rates, while enhancing long-term growth and value creation of the Janssen Pharmaceuticals business, according to the news release. Post-transaction close, Johnson & Johnson expects the transaction to increase its long-term revenue growth rate by at least 1% and its long-term earnings growth rate by 1.5% - 2% above current analyst consensus. Johnson & Johnson estimates EPS accretion in the first full year of $0.35 to $0.40. Johnson & Johnson shareholders are also expected to realize additional value from the Johnson & Johnson ownership interest in R&D NewCo.
R&D NewCo will inherit Actelion's fully established and validated drug discovery engine based in Allschwil, Switzerland. R&D NewCo will have a broad portfolio of drug candidates in clinical development, across four focused therapeutic franchises: specialty cardiovascular disorders, central nervous system disorders, immunological disorders, and orphan diseases.