26.01.2017 10:40:45

Actelion Stock Up On $30 Bln Takeover Deal With JNJ; To Spin-Out R&D To New Firm

(RTTNews) - Shares of Actelion Ltd.(ALIOF.PK) were gaining around 21 percent in the morning trading after the Swiss biotechnology firm on Thursday agreed to a $30 billion takeover by drug major Johnson & Johnson (JNJ).

Immediately prior to the completion of the acquisition, Actelion will spin out its drug discovery operations and early-stage clinical development assets into a newly standalone Swiss biopharmaceutical company.

Under the deal terms, Johnson & Johnson will launch an all-cash tender offer in Switzerland to acquire Actelion for $280 per share, payable in U.S. dollars, which equates to 280.08 Swiss francs per share as of January 25.

The shares of new R&D company, which will be listed on the SIX Swiss, will be distributed to Actelion's shareholders as a stock dividend upon closing of the tender.

Initially, Johnson & Johnson will hold 16 percent of the shares of R&D NewCo and have rights to an additional 16 percent equity through a convertible note. Johnson & Johnson will also receive an option on ACT-132577, a product within R&D NewCo being developed for resistant hypertension currently in phase 2 clinical development.

R&D NewCo will be led by Actelion's current scientific team with Jean-Paul Clozel, Chief Executive Officer and founding member of Actelion, as Chief Executive Officer. Jean Pierre Garnier, Chairman of the Board of Actelion, will be Chairman of the Board of R&D NewCo.

The acquisition, which was unanimously approved by the Boards of Directors of both companies, is expected to be immediately accretive to Johnson & Johnson adjusted earnings per share and accelerate its revenue and earnings growth rates. Johnson & Johnson estimates earnings per share accretion in the first full year of $0.35 to $0.40.

Johnson & Johnson will fund the transaction with cash held outside the United States. Its shareholders are also expected to realize additional value from the company's ownership interest in R&D NewCo.

The transaction is expected to close by the end of the second quarter of 2017.

The company noted that Actelion's franchise of differentiated, innovative products for pulmonary arterial hypertension is highly complementary to the existing portfolio of the Janssen Pharmaceutical Companies.

Garnier said, "Actelion's shareholders can monetize their holdings in Actelion at a highly attractive cash price of $280 per share, while at the same time retaining a significant stake in the future potential upside of Actelion's earlier stage pipeline, through their ownership of R&D NewCo."

In Zurich, Actelion shares were trading at 273.90 francs, up 20.45 percent.

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