Beacon Transcript – Johnson & Johnson, the United States healthcare company, is seeking to buy Actelion, the largest European biotechnology firm.
Johnson & Johnson or J&J is a New Jersey-based multinational company which produces pharmaceutical, therapeutic, diagnostic, surgical, and biotechnology-related products.
This Friday, the company released a statement in which it revealed its plans of acquiring Actelion.
Actelion Pharmaceutical Ltd. is an Allschwil, Switzerland-based company which was founded in 1997 and manufactures biotechnology and pharmaceutical products.
The company targets the discovery and development of innovative, new treatments, which it then commercializes.
Currently, Actelion is the largest European biotechnology and it has an approximated value of $20 billion.
As J&J announced their plan of acquiring the company, Actelion confirmed the statement. However, the biotech firm also pointed out that there are no fixed plans and that the deal might not take place.
An acquisition of the Actelion Pharmaceuticals company would bring quite a number of benefits to Johnson & Johnson.
The US firm would benefit from an increase in its products range which would diversify its prospects. It would also boost the company’s drug pipeline.
A wider, more varied, possibly cheaper products range would become a market advantage. At the moment, Remicade, the arthritis drug which is also J&J’s biggest product, is in competition with the cheaper product alternative offered by Pfizer Inc.
As an Actelion acquisition will offer new products, it will also come with rarer drugs thanks to the company’s focus and target of dealing with rare diseases.
The rarer products and diseases treatments would, as such, also escape from the market pricing pressures as the respective drugs are less common.
Bank of America analysts have released a series of estimates about the potential investments and company market values in relation to the J&J buy.
Actelion shares saw an increase this Friday as their value rose by about 19 percent to a value of 187.70 Swiss Francs. As such, the company was estimated to be worth somewhere around $20 billion.
The Bank of America Analysts estimated that a bid to buy Actelion would be worth in between $217 and $246 per share, or 220 to 250 Swiss francs.
With the market’s intent and predisposition to buy fast-growing companies, the biotech firm’s products are expected to bring in significant profits.
The Uptravi and Opsumit are Actelion-produced drugs that treat high blood vessel pressure conditions in the lungs.
Analysts consider that they will bring in an approximated $1.4 billion in value this year and that by 2020, their combined sales value will surpass $4.6 billion
This is not the first time a company has offered to buy the European independent biotech firm. But the Actelion Chief Executive and Co-founder, Jean-Paul Clozel, has opposed most sales offers.
As the future of the deal remains to be determined, Johnson & Johnson will still probably continue its expansion plans.
Earlier this year, Alex Gorsky, the company’s chief executive, declared that J&J will be seeking to expand. The areas targeted are the main medical device, pharmaceutical, and consumer segments.
To this purpose, J&J finalized in September a deal so as to buy the Abbot Laboratories eye care segment for an estimated $4.33 billion.
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