That didn’t take long. Just a few days after Johnson & Johnson formally bowed out of its Actelion takeover effort, Sanofi is reportedly nearing a deal for the Swiss drugmaker.
A transaction between the two could be announced as soon as next week, Bloomberg’s sources said, and it could see Actelion net $275 per share—a price that would value the company at $29.6 billion. That price may include a contingent value right (CVR), a security that pays out only if pipeline meds hit certain targets.
As for which pipeline meds would be involved, that’s one thing the companies are still working out—but ponesimod, Actelion’s relapsing multiple sclerosis candidate, is among the possibilities, sources told the news service.
Of course, negotiations could still fall apart, the sources cautioned. After all, an eleventh-hour request from Actelion CEO Jean-Paul Clozel for a bumped-up price reportedly scuttled his company’s potential J&J tie-up. With sale-shy Clozel reluctant to hand over the company he founded outright, the New Jersey pharma giant announced Tuesday it was quitting on talks that had reportedly been going on informally for two months.
“Johnson & Johnson was not able to reach an agreement that it believed would create adequate value for its shareholders,” it said.
Sanofi, though—an M&A-hungry drugmaker that saw its pursuit for Medivation foiled by deep-pocketed Pfizer earlier this year—was more than willing to step in, and a high price may not scare off the French pharma. New CEO Olivier Brandicourt has said he’s open to larger deals—about the size of Sanofi’s 2011 Genzyme pickup, which measured more than $20 billion—but he hasn’t explicitly ruled out going higher.
When it comes to Actelion, though, maybe he should, Bernstein’s Tim Anderson suggested Tuesday. He pointed out that Actelion's pulmonary arterial hypertension meds, though fast-growing, don’t bring along the breadth Genzyme’s portfolio did.
A $30 billion deal would equate to 13 times Actelion sales and 30 times earnings (before interest and taxes)—“high figures,” he wrote in a note to clients.
“Winning a bidding war when it comes to acquiring biopharmaceutical companies almost always equates to overpaying,” Anderson wrote in a note to clients. “These are not bragging rights.”