Actelion weighs complex deal to combine with part of J&J
Structured transaction would see Swiss company remain independent
Actelion, Europe’s largest biotech company, is considering a complicated deal to combine with part of Johnson & Johnson, a move that will leave the Swiss company independent from the US drugs giant, people close to the discussions said.
The structured transaction would create a new, larger biotech company uniting the Swiss company with relevant parts of J&J’s pharma business, people involved in the talks said.
J&J would become a major shareholder in the new company and could be asked to add some cash to complete the deal, these people added.
The Swiss group is not actively considering selling itself outright, people briefed about the matter said, and it is working with advisers including at Bank of America Merrill Lynch as it reviews its options. The situation is fluid and positions could change during the talks, these people cautioned.
J&J confirmed on Friday that it was in preliminary talks with Actelion about a transaction but did not give details. It is not clear whether J&J is amenable to such a complex deal, which would force it to cede control of some of its own assets — especially when the cash-rich company has the firepower to buy companies of Actelion’s size outright.
However, according to one person briefed about the situation, J&J had anticipated that Actelion’s chief executive and founder, Jean-Paul Clozel, would not want to sell out and had initiated discussions with a view towards finding some other solution that would be attractive to him and his shareholders.
Since the talks were confirmed, investors have pushed up the share price in anticipation of an outright sale that would see the Swiss company acquired at a significant premium. Over the past three trading days, shares in Actelion have soared 23 per cent, reaching SFr190 in Zurich trading. The company’s market value closed at SFr20.5bn ($20.2bn) on Monday.
Actelion and J&J companies declined to comment. Bank of America also declined to comment.
Since the disclosure, bankers are scrambling to get other large drugmakers to consider making their own approaches to the company.
Swiss drugmaker Roche is often cited as possible acquirer of Actelion, given the close ties between the companies. Mr Clozel was an executive at Roche before founding Actelion with his wife, Martine, and others in 1997.
In 2011, Mr Clozel successfully fended off activist investor Elliott Management, which was pushing the company to explore a sale. The company’s share price has since trebled, helping Actelion executives win credibility with investors.
On an investor call in September, Mr Clozel said he had no desire to retire. He said: “I would say, give me three years, three to four years, to change completely Actelion and to have Actelion at another level as a company.”
Actelion’s drug portfolio is predominantly focused on treating pulmonary arterial hypertension, adding to the US group’s existing pharma franchise. Actelion, which employs about 2,500 people, had sales of SFr2bn in 2015. A growing part of this revenue now comes from its Opsumit drug, as its blockbuster treatment Tracleer has lost its patent protection.