J&J to acquire Acelion for $30 B with spin-out of new R&D company

Actelion R&D unit to spin out into standalone company based and listed in Switzerland.

Actelion has established a leading franchise of differentiated, innovative products for pulmonary arterial hypertension (PAH) that is highly complementary to the existing portfolio of the Janssen Pharmaceutical Companies of J&J. The addition of Actelion's specialty in-market medicines and late-stage products is consistent with &J's efforts to grow in attractive and complementary therapeutic areas and serve patients with serious illnesses and significant unmet medical need. In addition, the transaction structure will provide J&J flexibility to accelerate investment in its industry-leading, innovative pipeline to drive additional growth. Further, J&J expects to retain Actelion's presence in Switzerland and also leverage its complementary capabilities in shaping medical paradigms.

As part of the transaction, immediately prior to the completion of the acquisition, Actelion will spin out its drug discovery operations and early-stage clinical development assets into a newly created Swiss biopharmaceutical company ("R&D NewCo"). The shares of R&D NewCo, which will be listed on the SIX Swiss Exchange (SIX), will be distributed to Actelion's shareholders as a stock dividend upon closing of the tender. J&J will initially hold 16% of the shares of R&D NewCo and have rights to an additional 16% of R&D NewCo equity through a convertible note. The arrangements will result in R&D NewCo launching with cash of CHF 1 billion to be made available at the closing of the transactions. J&J will also receive an option on ACT-132577, a product within R&D NewCo being developed for resistant hypertension currently in Phase II clinical development. Together, these arrangements with R&D NewCo will provide J&J with additional sources of innovation and value. R&D NewCo will be led by Actelion's current scientific team with Jean-Paul Clozel, CEO and founding member of Actelion, as CEO. Jean Pierre Garnier, Chairman of the Board of Actelion, will be Chairman of the Board of R&D NewCo.

"We believe this transaction offers compelling value to both J&J and Actelion shareholders," said Alex Gorsky, Chairman and CEO of J&J. "Actelion has built an attractive, growing business with world-class commercial and clinical development capabilities. Adding Actelion's portfolio to our already strong Janssen Pharmaceuticals business is a unique opportunity for us to expand our portfolio with leading, differentiated in-market medicines and promising late-stage products. We expect to leverage our established global presence and commercial strength to accelerate growth and patient access to these important therapies. Further, we believe R&D NewCo will be strongly positioned to continue Actelion's legacy of innovation and look forward to collaborating on the development of cutting-edge new therapies."

Mr Garnier sai:, "I'm very proud that we have created such a unique value proposition through this structured transaction. Actelion's shareholders can monetize their holdings in Actelion at a highly attractive cash price of $280 per share, while at the same time retaining a significant stake in the future potential upside of Actelion's earlier stage pipeline, through their ownership of R&D NewCo. Jean-Paul Clozel and I have high expectations for this new, well-funded biotech company with a significant portfolio of drugs in the clinic. R&D NewCo will be led by an experienced and proven scientific team."

Dr Clozel said: "In making this offer, J&J is recognizing all that has been created at Actelion during the last 20 years, and in particular the quality of our PAH franchise, the potential of our key marketed medicines and our promising late-stage development assets. The newly created R&D company allows us to continue with our successful culture of innovation. It is enormously exciting to continue to develop new and differentiated products, in multiple therapeutic areas, to improve the lives of patients."