J&J Spends $30 Billion on Switzerland's Actelion - Drug Discovery and Development

Johnson & Johnson is buying Swiss pharmaceutical Actelion in a $30 billion deal that will boost its treatments for life-threatening high blood pressure conditions.

The deal announced Thursday comes a little more than a month after J&J said it had ended talks to buy Actelion, and the Swiss company had said it was in discussions with another party.

The New Jersey maker of Band-Aids and prescription drugs said Thursday it will boost its portfolio of medicines and late-stage products in a complementary fit with Actelion’s area of expertise, pulmonary arterial hypertension, which is high blood pressure in the arteries between the heart and lungs.

Actelion products include Tracleer, an oral treatment sold in 60 markets.

The companies also will spin off Actelion’s research and development unit into a stand-alone company in Switzerland. J&J will own 16 percent of the business and have rights to an additional 16 percent.

J&J said funding for the acquisition will come from its holdings outside the United States. Many U.S. companies with international operations are holding sizeable amounts of money overseas due to high tax rates they would pay to return the cash to the United States.

Earlier in the week, J&J announced fourth-quarter profits that narrowly surpassed expectations, while giving Wall Street a softer-than-expected 2017 earnings forecast.

J&J has been dealing with sliding revenue from a top-selling drug, the biologic immune disorder treatment Remicade, which is facing competition from a Pfizer product.

With the Actelion deal, J&J is paying “top dollar” to replace Remicade sales, said Erik Gordon, a professor and pharmaceuticals analyst at University of Michigan’s Ross School of Business.

The New Brunswick, New Jersey, company made several deals in 2016, including a $3.3 billion purchase of hair and personal products maker Vogue International LLC.

In September, J&J — one of the 30 stocks that make up the Dow Jones Industrial Average — also said it would buy the medical optics division of Abbott Laboratories for $4.3 billion in cash.

The Actelion deal, approved unanimously by the boards of both companies, is to be completed in the second quarter, pending regulatory approvals, and J&J said it expects the deal to immediately boost revenues and earnings per share.

J&J shares slipped 52 cents to $112.28 in early morning U.S. trading Thursday.

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