Johnson & Johnson Exits 3 Biotechs but Keeps Stakes in These Rumored Acquisition Targets
Key Points
- Johnson & Johnson exited stakes in Arrowhead Pharmaceuticals, BiomX, and Senseonics Holdings in its restated fourth-quarter report.
- The company retained stakes in Legend Biotech and Protagonist Therapeutics, both rumored acquisition targets, with its Protagonist shares valued at ~$246 million.
- J&J’s CEO stated that value is typically created by smaller deals, aligning with its focus on science and value creation.
Johnson & Johnson’s restated fourth-quarter holdings report, filed last week, reveals that the company exited three biotechs while retaining its stakes in several rumored acquisition targets.
The changes included the sale of 247,598 shares in Arrowhead Pharmaceuticals, previously a partner of Johnson & Johnson’s Janssen unit, which rebranded as its Innovative Medicine division. The relationship came to an end in 2023 after Janssen shrunk its infectious disease and vaccine portfolios.
Johnson & Johnson also exited BiomX, another former collaborator, through the sale of 96,866 shares. The Israeli biotech in December suddenly halted its lead clinical program due to safety concerns, and has been restructuring since.
Also in the fourth quarter, Johnson & Johnson unloaded 54,621 shares of Senseonics Holdings to close out its stake in the medical technology maker.
Other holdings went unchanged, including Johnson & Johnson’s stake of 814,586 shares in Legend Biotech. The companies have an agreement to co-develop a cell therapy targeting multiple myeloma. Rumors surfaced in 2024 that Legend had enlisted a financial planner amid takeover interest, with analysts eyeing Johnson & Johnson as a potential buyer.
As of the end of the quarter, the company’s largest stake by dollar value was in Protagonist Therapeutics, another speculated acquisition target. Johnson & Johnson held 2,449,183 shares in the company, which were worth around $246 million based on Tuesday’s closing price of $100.39. The companies are already working together to develop an oral treatment for immune diseases.
Johnson & Johnson has long placed a premium on science and value creation, two factors that drive its acquisition strategy. Speaking at last year’s J.P. Morgan Healthcare Conference, CEO Joaquin Duato asserted that larger deals were “outliers” and that value was “typically created by smaller deals.”