Johnson & Johnson in talks to buy Actelion for $17 billion

Johnson & Johnson has approached Actelion about a potential takeover of the $17-billion Swiss drugmaker as the US health-care giant works to expand its pharmaceutical lineup, people familiar with the matter said.

Deliberations are still at an early stage following J&J’s initial offer, the people said, asking not to be identified because the talks are private. 

Actelion is working with an adviser to explore options, and any discussions may not lead to a transaction, they said. The company may also attract other suitors, such as Novartis AG and Sanofi, separate people with knowledge of the matter said. 

Representatives for J&J, Allschwil, Switzerland-based Actelion, Novartis and Sanofi declined to comment.

Shares of Actelion jumped the most in more than four years. While Actelion, Europe’s largest biotech firm, has been named as a potential takeover target for years, Chief Executive Officer and co-founder Jean-Paul Clozel has previously said the company planned to remain independent. The 61-year-old, who is one of 

Actelion’s largest shareholders, may now be more open to entertaining a sale at a sufficient premium, one of the people said.

An acquisition would add to the $246 billion of pharmaceutical deals announced this year, data compiled by Bloomberg show.

Actelion rose 11%to 175.90 Swiss francs at 3:41 pm in Zurich Friday after earlier jumping as much as 19 per cent, the biggest intraday gain since April 2012. The shares had risen 13%this year through Thursday, valuing the company at almost $17 billion. New Brunswick, New Jersey-based J&J, with a market capitalisation of about $308 billion, rose less than 1 percent to $113.62.

J&J Chief Financial Officer Dominic Caruso has said he would consider deals of any size that fit into the strategy of building up its three main businesses — consumer, medical devices and pharmaceuticals. The company agreed to buy the eye-surgery equipment unit of Abbott Laboratories for $4.33 billion in September.

Actelion has brought to market two new lung medicines that are poised to become blockbusters over the next three years. That will reduce dependence on Tracleer, a medicine to treat a type of high blood pressure that affects arteries in the lungs, which accounted for more than half its revenue last year.

Sales of Tracleer may plummet following the introduction of cheaper copycats in the first quarter of 2017. Meanwhile, revenue from Opsumit is projected to surpass $1 billion next year, while Uptravi is forecast to cross that threshold in 2019, according to analysts surveyed by Bloomberg. For the longer term, the company is also developing experimental drugs for insomnia, lupus and multiple sclerosis.