Tue, Mar. 10, 3:51 PM
- Traders spread their love beyond the rumored acquisition target-stoked up move of Acadia Pharmaceuticals (ACAD +17.7%) to Geron (GERN +12.3%). Shares are up on a whopping 24M shares. Speculators are betting that Geron will be taken out, possibly by Johnson & Johnson (JNJ -0.8%), after the latter was outbid by AbbVie (ABBV +0.9%) for Pharmacyclics (PCYC).
- Previously: Geron gets boost from AbbVie-Pharmacyclics deal (March 5)
- Previously: Acadia Pharma now +17.7% as it cancels out of another conference (March 10)
Thu, Mar. 5, 10:07 AM
- On its conference call this morning to discuss the acquisition of Pharmacyclics (PCYC +10.6%), AbbVie (ABBV -2.4%) CEO Rick Gonzalez said that three companies were in the final bidding for the Imbruvica maker in an intensely competitive process. He said that a disclosure will be forthcoming that will provide additional details of the bids.
- The transaction will be accretive to earnings beginning in 2017, adding $0.60 to EPS in 2019 and more than $1.00 by 2021. The incremental sales in 2019 are projected to be >$4B.
- Imbruvica sales should be >$1B in the U.S. this year and peak at >$7B (ABBV's portion). Peak global sales may be ~$11.5B, but J&J's (JNJ +1.1%) contribution is its responsibility so no firm forecast is appropriate.
- Peak sales of the oncology portfolio of both companies could be >$20B by the mid-2020s.
- Mr. Gonzalez said that Humira's status had no bearing on the deal. He was confident with his top seller's long-term prospects, citing two new indications and the pending new formulation that will provide patent protection until the early 2030s. He also said AbbVie will vigorously defend Humira's IP against biosimilars.
- The transaction is 58% in cash and 42% in stock. The final number of ABBV shares will be determined at the time of closing in Q2. About 50% of the stock will be sourced from buybacks and half newly issued. The Board has authorized a $5B increase in its share repurchase program. There will be a 20% dilution to current shareholders. Updated 2015 Non-GAAP EPS is now $4.05 - 4.25 from $4.25 - 4.45.
Thu, Mar. 5, 8:52 AMAbbVie's high-priced takeout of Pharmacyclics bodes well for other biotechs with high potential drugs
- AbbVie's (NYSE:ABBV) extraordinarily generous buyout of Pharmacyclics (NASDAQ:PCYC) is a crystal clear example of how keen big pharma is to boost its prospects with biotech drugs with blockbuster potential. The transaction's $20B tab, backing out PCYC's $1B cash balance, values Imbruvica (ibrutinib) at $40B since Pharmacyclics' commercial partner Johnson & Johnson (NYSE:JNJ) gets 50% of Imbruvica's revenue. This implies a multiple of almost 7x Imbruvica's projected peak sales of $6B. By comparison, Amgen's (NASDAQ:AMGN) takeout of Onyx Pharma and Sanofi's (NYSE:SNY) takeout of Genzyme were both at 5x premiums.
- The looming patent expiration for Humira ($12.5B in sales the past four quarters) undoubtedly provided AbbVie extra incentive to get the deal done.
- Adding 50% of Imbruvica's sales to AbbVie's top line should increase its revenue growth 3 - 7% and EPS growth 8 - 11% through 2020.
- According to RBC analyst Michael Yee, other biotechs on the big ticket acquisition radar are: BioMarin Pharmaceuticals (NASDAQ:BMRN), Dyax (NASDAQ:DYAX), Esperion Therapeutics (NASDAQ:ESPR), United Therapeutics (NASDAQ:UTHR), Vertex Pharmaceuticals (NASDAQ:VRTX), Intercept Pharmaceuticals (NASDAQ:ICPT), Juno Therapeutics (NASDAQ:JUNO), Kite Pharma (NASDAQ:KITE), PTC Therapeutics (NASDAQ:PTCT) and Receptos (NASDAQ:RCPT).
Wed, Mar. 4, 11:39 PM
- Both boards have signed off on AbbVie's (NYSE:ABBV) $21B surprise acquisition of Pharmacyclics (NASDAQ:PCYC), announced a short while ago amid speculation that Johnson & Johnson (NYSE:JNJ) (or, earlier, Novartis (NYSE:NVS)) would be the one to acquire the cancer biotech.
- With the deal, AbbVie gets Pharmacyclics' blockbuster Imbruvica drug for hematologic malignancies -- which logged $548M in revenues in 2014 (Q4 earnings) and might go all the way to $5B/year. Imbruvica has received four indications in less than 15 months -- the latest being for Waldenström's Macroglobulinemia at the end of January.
- And with Imbruvica, AbbVie can lessen its reliance on its key drug Humira, an aging rheumatoid arthritis medication.
- The acquisition is expected to close in the middle of the year.
- Question: What happened to Pharmacyclics' Imbruvica partner JNJ on this deal?
- Previously: Pharmacyclics Q4 revenue up 135%, Imbruvica growing exponentially (Feb. 18 2015)
Wed, Mar. 4, 11:04 PM
- AbbVie (NYSE:ABBV) says it will be the one to acquire cancer biotech Pharmacyclics (NASDAQ:PCYC), with a surprise bid of about $21B: $261.25/share in cash and equity.
- Pharmacyclics closed up 6.3% today to $230.48 (and gained another 2.9% after hours) on rumors that Johnson & Johnson (NYSE:JNJ) was making a bid for the $17B company.
- Previously: Pharmacyclics up on rumored J&J interest (Mar. 04 2015)
- Previously: Pharmacyclics up on potential buyout (Feb. 25 2015)
- Press release
Wed, Feb. 25, 1:43 PM
Mon, Feb. 23, 4:18 PM
- It appears that Johnson & Johnson (NYSE:JNJ) may have found a buyer for its underperforming Cordis business, something it's been seeking since August. Cardinal Health (NYSE:CAH) is rumored to be the front-runner for the medical device company.
- Cordis is the second largest unit within J&J, but it was the worst performing last year with a 3.5% decline in sales despite being the pioneer of drug-coated stents and the former market leader. The company was unable to maintain its leadership due to formidable competition and downward price pressure from insurers and hospitals.
- The company expects Cordis to fetch $1.5B - 2.0B.
Fri, Feb. 20, 5:56 PM
- Bloomberg reports Johnson & Johnson (NYSE:JNJ) is exploring the sale of its Cordis medical device unit to Cardinal Health (NYSE:CAH) for as much as $2B.
- The WSJ reported last August J&J is seeking a buyer for Cordis, whose products include stents, guidewires, and catheters, and that it could get $1.5B-$2B for the business.
- CAH +1.5% AH to $88.34.
Dec. 3, 2014, 10:01 AM
Nov. 24, 2014, 8:40 AM
- Tetraphase Pharmaceuticals (NASDAQ:TTPH) is reportedly considering selling itself after being approached by interested suitors. Sources say the acquirer could be Acetelion (OTCPK:ALIOF) (OTC:ALIOY) or Roche (OTCQX:RHHBY).
- The attraction is Tetraphase's antibiotic eravacycline, currently in Phase 3 development. Both oral and IV formulations of the drug have demonstrated higher dose response rates than Johnson & Johnson's (NYSE:JNJ) Levaquin (levofloxacin) for the treatment of complicated urinary tract infections. In the Ignite-2 study, patients receiving 200 mg eravacycline IV-to-oral doses achieved a response rate of 70.8% while patients receiving 250 mg IV-to-oral doses achieved 64.3%, both significantly ahead of Levaquin's 52.2% response rate.
- A trial comparing eravacycline to Merck's (NYSE:MRK) Invanz (ertapenem) for the treatment of complicated intra-abdominal infections is underway.
- TTPH is up 18% premarket on light volume.
- Previously: Tetraphase completes eravacycline Phase 3 enrollment
Nov. 7, 2014, 9:52 AM| 7 Comments
Sep. 30, 2014, 8:45 AM
- Johnson & Johnson (NYSE:JNJ) acquires privately-held clinical stage biopharmaceutical firm Alios BioPharma for $1.75B in cash.
- Alios develops therapies for viral diseases. Its lead product is AL-8176, an orally administered antiviral therapy in Phase 2 clinicals for the treatment of infants with respiratory syncytial virus (RSV).
- Janssen Pharmaceuticals R&D Chief William N Hait, M.D., Ph.D. says, "We are excited that this acquisition will enable us to explore treatment options for a number of viral infections, including RSV, the last of the major pediatric diseases with no available preventive therapy."
Sep. 24, 2014, 9:38 AM
- Colgate-Palmolive (NYSE:CL) is an attractive acquisition target with its core products seeing increasing demand in developing nations, reasons Bloomberg.
- Despite the company's large size, its broad distribution network could push a buyer to stretch the wallet a bit.
- A large balance sheet and a global reach would be needed to contemplate a Colgate-Palmolive takeover. Unilever (NYSE:UL) and Johnson & Johnson (NYSE:JNJ) might fit the bill, note analysts.
Aug. 28, 2014, 6:08 PM
- Johnson & Johnson (NYSE:JNJ) is beginning the process of seeking a buyer for its Cordis unit that makes medical devices including stents and catheters, WSJ reports.
- Cordis reportedly could fetch $1.5B-$2B and is expected to attract interest from P-E firms and other health care companies.
- A sale would mark the latest divestiture for JNJ, which is looking to shed slower-growth businesses and reduce annual costs by $1B; JNJ said in 2011 it would leave the cardiac stent business after years of falling sales and market share.
Aug. 22, 2014, 11:21 AM
- Johnson & Johnson (JNJ -0.7%) invests $20M in the form of a convertible note in regenerative medicine company ViaCyte in exchange for a future equity stake and the rights to its type 1 diabetes combination product candidate VC-01.
- VC-01 works by loading pancreatic progenitor cells into a proprietary device that is implanted under the skin. The progenitor cells then mature into insulin-producing cells that assist the under-producing pancreas.
Jun. 12, 2014, 4:16 PM
- Privately-held biosimilar developer Epirus Biopharmaceuticals acquires Zalicus (ZLCS +38.9%) in an all-stock deal. The post-merger firm will be named Epirus Biopharmaceuticals. Current ZLCS shareholders will own ~19% of the combined enterprise. Their proportion could go down as low as 14% if Zalicus' cash position falls below $9M at closing.
- Epirus's pipeline includes biosimilars for Janssen's (JNJ -0.8%) Remicade, AbbVie's (ABBV -1.1%) Humira and Genentech's (RHHBY -0.6%) Avastin.
JNJ vs. ETF Alternatives
Johnson & Johnson is a holding company, which is engaged in the research and development, manufacture and sale ofproducts in the health care field within its Consumer, Pharmaceutical and Medical Devices, and Diagnostics business segments.
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