Actelion talking to Sanofi after J&J exit
ZURICH/LONDON — Switzerland’s Actelion Ltd is in talks with French drug maker Sanofi about a deal, sources said on Wednesday, after US health care group Johnson & Johnson abandoned efforts to buy the company.
Two people familiar with the situation said discussions were advanced but a deal was not assured. Actelion’s shares ended 9 % lower on investor concern that J&J’s exit underlined the challenges facing any bidder for Europe’s biggest biotech group.
One option under consideration is for Sanofi to give shareholders a so-called contingent value right (CVR) on top of cash. The CVR would pay out if certain Actelion drugs live up to commercial expectations.
Sanofi, which also provided a tradable CVR when it bought US rare diseases firm Genzyme for $20 billion in 2011, declined to comment.
Sources said Roche was closely monitoring developments and might yet step in, if talks with Sanofi foundered. A Roche spokesman declined to comment.
Sanofi was trumped in August by Pfizer’s $14-billion bid for US cancer drug company Medivation and is still eager for deals to broaden its drug lineup.
However, analysts said Sanofi Chief Executive Olivier Brandicourt could ill afford to fail in a second high-profile bid.
Actelion told J&J it was confident it could attract an offer significantly higher than the approximately 250 Swiss francs per share the US company had offered, according to one person familiar with the matter.
There were also disagreements about the proposed deal’s structure, the person added.
Actelion shares had closed at 208.50 Swiss francs on Tuesday, a 25% premium to their price before J&J’s bid became public two weeks and giving the company a market capitalization of 22.5 billion Swiss francs ($22.2 billion). The Swiss company, founded by its CEO Jean-Paul Clozel in 1997, confirmed talks over a “possible strategic transaction” but did not name the counterparty.
A spokesman declined further comment but sources with knowledge of the matter identified Sanofi.
Analysts have previously named Sanofi as a potential buyer for Actelion, whose portfolio of drugs against deadly pulmonary arterial hypertension — elevated pressure in arteries connecting the heart and lungs — would supplement Sanofi’s Genzyme unit.
Even so, a competitive auction could drive up its price to unrealistic levels.
Clozel, who worked for Roche for 12 years before founding Actelion, and his wife, Chief Scientific Officer Martine Clozel, have built up a world-leading drug portfolio at Actelion to treat pulmonary arterial hypertension.
The Clozels aim to expand in drugs for multiple sclerosis and clostridium difficile, but regulatory approvals for those are years away.
The company is also counting on its new pulmonary arterial hypertension treatments Opsumit and Uptravi, which combined are forecast to bring in nearly 4.5 billion francs in annual sales by 2020. —