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J&J back in frame to buy Actelion after Sanofi talks break down

Parties now in exclusive negotiations about a possible deal

Johnson and Johnson logoTalks between Actelion and Sanofi over a possible takeover have broken down, and the Swiss biotech is back at the table with previously spurned Johnson & Johnson.

J&J confirmed in a short statement that it was talking with Actelion once again, and this time said it is in 'exclusive' negotiations about a possible deal. As before, all parties are taking pains to stress that there is no guarantee that an agreement will be reached.

J&J and Actelion insisted they will say no more on the matter until 'it is appropriate to do so, or a formal agreement has been reached', and Sanofi is also keeping silent. News of the volte-face came just a week after Actelion said it had abandoned talks with J&J, and mere hours after reports were emerging of an imminent deal with the French pharma major.

At the time, J&J's offer - estimated at around 250 Swiss francs per share which would value Actelion at around $26bn - was reportedly turned down as being too low. There were also suggestions that Actelion chief executive Jean-Paul Clozel was pushing for a say in the development of certain pipeline assets.

According to a Bloomberg report citing unnamed sources, Sanofi had proffered a sweetened deal -including $20 per share in the form of contingent voting rights (CVRs) - that would have given Actelion shareholders a further return on top of the purchase price if Actelion's pipeline delivers as promised.  

Actelion has been through a difficult patch after losing patent protection for pulmonary artery hypertension (PAH) blockbuster Tracleer (bosentan), but is on the up with strong growth for follow-up PAH drugs Opsumit (macitentan) and Uptravi (selexipag. 

The two new drugs are predicted to bring in combined sales of $4bn-plus by 2020, and Actelion also has some pipeline candidates in which Clozel has great confidence -including ponesimod for multiple sclerosis, an insomnia candidate and early-stage projects for cardiovascular and inflammatory disorders.

Actelion shares rose sharply yesterday as reports involving both Sanofi and J&J emerged. Shares in Sanofi were however largely unchanged in the wake of the Actelion and J&J announcement - possibly reflecting investors' concerns that Actelion could prove an expensive purchase for the French pharma major.

Buying Actelion could give J&J some near-term growth products to boost its sales as it faces biosimilar competition to blockbuster immunology therapy Remicade (infliximab), which generated $6.6bn in sales last year.

Article by
Phil Taylor

22nd December 2016

From: Research

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