J&J to pay $30 billion for Actelion

Ending months of negotiations, Johnson & Johnson will pay $30 billion to acquire the Swiss biotech firm Actelion. The proposed transaction is the biggest to date in a year expected to bring significant deal-making by big pharmaceutical companies.

The purchase—the biggest ever for J&J—gives the pharma firm a portfolio of treatments for pulmonary arterial hypertension (PAH), a rare type of high blood pressure that affects the lungs and heart. Those PAH drugs collectively brought in more than $2 billion in sales in 2015.

Actelion first confirmed in November that J&J had approached with a takeover offer, though by December, Sanofi emerged as a possible suitor.

Ultimately, J&J, which is grappling with new competition in the U.S. for its top-selling drug, Remicade, was willing to get creative with the structure of the deal.

Although the big pharma firm is capturing Actelion’s PAH portfolio and late-stage pipeline, Actelion’s drug discovery activities and some early-stage drug candidates will be spun out into a newly created biotech firm. J&J will hold a 16% stake in the new company, and has the right to later buy another 16%.

The yet-to-be-named biotech will be outfitted with $930 million in cash and run by Actelion’s existing scientific team, retaining upwards of 700 out of Actelion’s 2,500 employees, Jean-Paul Clozel, founder and CEO of Actelion, said at a press conference. Clozel will lead the new company.

The purchase of Actelion is the first major deal in a year expected to bring heavy merger and acquisition activity as drug firms grapple with pressures ranging from lagging productivity, new competition from biosimilars, and uncertainty around drug pricing.

Celgene added to this year’s mergers & acquisitions tally, saying today it would pay $300 million up front to acquire Delinia, a privately held biotech firm developing treatments for autoimmune diseases. Delinia’s shareholders could see another $475 million in milestone payments as its molecules advance into the clinic.

Delinia was just launched in September, when it announced it had raised $35 million in funding from Atlas Venture and Sofinnova Partners to develop proteins that can modulate the activity of regulatory T cells.