Johnson & Johnson in Talks to Buy Protagonist Therapeutics
The two companies are already codeveloping a treatment for ulcerative colitis
Johnson & Johnson JNJ 0.24%increase; green up pointing triangle is in talks to buy Protagonist Therapeutics PTGX 9.40%increase; green up pointing triangle in a deal that would solidify the companies’ existing partnership, according to people familiar with the matter.
The details
A deal is not guaranteed and the exact details being discussed couldn’t be learned, the people said.
Protagonist had a market value of over $4 billion as of Thursday’s close. Including a typical premium, a deal would likely value the company well above that.
J&J is already working with Protagonist to develop an oral treatment for immune diseases including plaque psoriasis and ulcerative colitis and has the exclusive rights to commercialize the product. It already owns close to 4% of Protagonist’s shares, according to FactSet.
By acquiring Protagonist, the healthcare conglomerate would also gain access to the drug rusfertide, from Protagonist and partner Takeda Pharmaceutical 4502 -2.63%decrease; red down pointing triangle. Rusfertide has shown promise in late-stage testing in treating a rare blood cancer called polycythemia vera.
Both assets would complement J&J’s portfolio of immune and cancer drugs.
Protagonist’s stock is up over 70% so far this year through Thursday, fueled in part by the promising trial results of its treatments for plaque psoriasis—an autoimmune disease—and the bowel disease ulcerative colitis. Shares have gained more than 450% since the company’s initial public offering in 2016.
Still, the deal would be easily digestible for J&J, which is worth close to $460 billion.
The context
J&J’s immune-disease drug Stelara, one of the company’s biggest sellers in recent years, began facing heavy competition from lower-cost copycats this year, and the company warned to expect accelerating sales losses.
The company has a number of products it is counting on to offset the losses. But like all drugmakers regularly dealing with patent expirations, J&J has turned to a mix of in-house development and acquisitions to refill its offerings.