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J&J abandons talks with Actelion as another suitor circles

Biotech said to be holding out for a higher offer as speculation of Sanofi interest builds
Actelion

Johnson & Johnson (J&J) has said it was unable to reach agreement with Actelion over an acquisition and has ended discussions, but Actelion says it is still talking to another company.

The Swiss rare disease specialist said this morning that it is "engaged in discussions with another party regarding a possible strategic transaction", adding however that there can be "no certainty at this point that any transaction will result".

The identity of the other suitor is being kept under wraps, but there is continued speculation that it may be French pharma group Sanofi, which also has a strong interest in rare diseases through its Genzyme subsidiary. Novartis has also been mentioned in dispatches as a possible buyer.

Actelion's share price was down around 9% this morning on the news that J&J had pulled out of talks.

J&J confirmed it was interested in pursuing a deal with Actelion last month, prompting a surge in the fiercely independent Swiss biotech's share price as analysts speculated J&J was offering around 250 Swiss francs per share, valuing the firm at around $26bn.

Actelion is said to have been holding out for a higher offer and also had some issues with the structure of the deal, according to reports. Analysts had questioned the rationale for J&J buying Actelion, suggesting there would be little room for cost-cutting and the price tag would likely be very steep. 

After a challenging couple of years following the loss of patent protection for pulmonary artery hypertension (PAH) blockbuster Tracleer (bosentan), Actelion is now riding high on the back of strong growth for follow-up PAH drugs Opsumit (macitentan) and Uptravi (selexipag), which are predicted to bring in combined sales of $4bn-plus by 2020.

It also has a pipeline of drugs outside of the PAH category, including candidates for multiple sclerosis which would also complement Sanofi's portfolio. A report in the Wall Street Journal has suggested that a Sanofi deal could value Actelion at closer to $30bn.

Article by
Phil Taylor

14th December 2016

From: Sales

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