J&J and Actelion's potential deal fix? $260 per share for marketed meds, spinoff for pipeline

Johnson & Johnson
Johnson & Johnson is weighing a complex deal for Actelion after walking away from buyout talks last month.

Would-be deal partners Johnson & Johnson and Actelion are onto their second round of talks, and this time, Actelion may just get the transaction it’s been hoping for.

The pair is hammering out a pact that would split Actelion’s commercialized meds from its R&D assets, sources tell Reuters. Actelion’s pipeline prospects would spin off into a new publicly traded company, while J&J would snap up the marketed meds with a cash offer in the neighborhood of $260 per share—slightly more than the figure the New Jersey company offered up before throwing in the towel last month.

Who would own the newly spun-off company—and whether Actelion founder and CEO Jean-Paul Clozel would run it—are still up for discussion, the sources said, but the companies could have an arrangement worked out by late this month.

Actelion, whose execs have been outspoken about their desire to stay solo, reportedly pushed J&J for a deal more complex than an outright buy when the pharma giant first came calling. But after two months-plus of back-and-forth with tough customer Clozel, J&J walked.

The move was fine by Actelion, which had another suitor in M&A-hungry Sanofi. But with the French behemoth reportedly ready to hand over $30 billion, J&J decided to get back into the mix, and Actelion returned to exclusive talks with its first-choice buyer.

The reason for that may hinge on J&J’s willingness to consider alternative deal types. Clozel, who founded the company with his wife Martine—Actelion’s chief scientific officer—after leaving an exec post at Roche, has touted Actelion’s standalone potential for years, dodging an $18.9 billion bid from fellow rare-disease drugmaker Shire and recording a 2011 triumph over activist hedge fund Elliott Advisors.

If Clozel did take the helm of the new entity, he would be able to continue presiding over a pipeline that includes candidates for pulmonary arterial hypertension—the therapeutic area that’s anchored Actelion’s success—as well as Clostridium difficile and multiple sclerosis.

J&J, meanwhile, would inherit moneymakers including Opsumit and Uptravi, meds that have stepped in to fill the void left by aging PAH star Tracleer. J&J’s own lead med, Remicade, is newly up against biosimilar competition from Pfizer in the U.S., making it an ideal time to bring in a new revenue stream.

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