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Actelion Approached by Johnson & Johnson about takeover deal

Actelion Approached by Johnson & Johnson about takeover deal
Actelion, Europe's largest biotech firm and which is currently valued at about $20 billion, is in talks with U.S. healthcare company Johnson & Johnson for a potential takeover. The U.S. firm announced late this week.
While claiming that there was no certainty of the deal going through, the lung disease specialist Actelion also confirmed that it had been approached by the U.S. firm about the potential takeover.
The prospects of J&J's prospects would be diversified and its drug pipeline would be boosted with an acquisition of the Swiss company. Cheaper competition from Pfizer Inc. is being posed to J&J's biggest product, the arthritis drug Remicade.
Valuing Actelion at around $20 billion, the company’s shares surged nearly 19 percent to a peak of 187.70 Swiss francs on Friday. They closed up 16.8 percent at 184.50 Swiss francs, more than matching the stock's total gains this year up to Thursday's close.
Since drugs in the area of rare diseases are less prone to pricing pressure and because of the fact that the company focuses on research and development of such drugs, it has become an attractive takeover target.
Stoked by appetite in the industry for fast-growing businesses, a bid for Actelion could be worth up to 220 Swiss francs ($217) or 250 Swiss francs ($246) per share, respectively, said analysts at Bank of America Merrill Lynch and Bryan Garnier.
Analysts forecast that up from an estimated $1.4 billion this year, more than $4.6 billion in combined 2020 sales would be generated from Actelion's Opsumit and Uptravi drugs to treat the life-threatening condition of high pressure in blood vessels to the lungs.
J&J's shares finished up nearly 1 percent at $114.13.
Expansion of its main consumer, medical device and pharmaceuticals segments, is the strategy that J&J is interested in and would want to  make deals to achieve this end, the company’s chief executive, Alex Gorsky, had said earlier this year. Abbott Laboratories' eye care business was agreed to be bought over by J&J for about $4.33 billion in cash in September.
It has been long since Actelion has been seen as a takeover target. However Jean-Paul Clozel, has repeatedly said that he wants Actelion to remain independent. Cloze los the Actelion co-founder and Chief Executive and he holds a 3.5 percent stake in the company.
Activist investor Elliott Management set up a campaign to put the biotech firm up for sale in 2011 and Clozel rallied shareholders against the campaign to stop the sale. Actelion's shares have more than tripled since then.
According to an investment banker who did not want to be named, a competing bid could come "most likely" from larger Swiss peer Novartis AG. The surce also confirmed to t the media that there may be broader interest from other suitors in Actelion.
The company was not very impressed by Actelion's drug pipeline, another source close to Novartis, however, was also quoted by the media.
A spokesman from Novartis declined to comment.

Christopher J. Mitchell

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