J&J Expects Actelion Deal to Close This Week

The European Commission has approved plans by US healthcare group Johnson & Johnson to acquire Swiss biotech Actelion, thus completing all global regulatory approvals. J&J said it now expects the all-cash public tender offer through its Swiss subsidiary Janssen Holding to be completed on Jun. 16.

The Commission’s green light for the offer of $280 per share ($30 billion in total) was made contingent on conditions intended to ensure that competition continues in the clinical development of insomnia drugs.

As described by the Commission in a statement, the Swiss company’s two treatments for insomnia under development are based on a novel mechanism of action, orexin-antagonists. If successfully brought to market they could constitute a significant improvement over existing treatments for insomnia by causing less dependency, minimizing risk of abuse and producing fewer central nervous system side-effects such as drowsiness or residual effects on the next day.

Under the agreement with J&J, Actelion will spin off its drug discovery operations and early-stage clinical development assets into a newly created Swiss biopharmaceutical company known as Idorsia. Shares in Idorsia are expected to be distributed to Actelion's shareholders as a dividend in kind and listed on the SIX Swiss Exchange on the day of the settlement of the public tender offer.

To address the EU’s competition concerns, Johnson & Johnson offered remedies to ensure that it can’t influence Idorsia's strategic decisions, nor get commercially sensitive information on the company’s insomnia medicine in development. Initially it will limit its shareholding to 9.9%, with the right to potentially increase the stake to as much as 32% through a convertible note. J&J has also made a commitment not to nominate any board members.

The research spinoff will be headed by Actelion’s founder and CEO, Jean-Paul Clozel.