$30B biopharma deal: J&J buys Actelion

Johnson & Johnson (JNJ) is moving to boost earnings and increase its revenues by buying Swiss biopharmaceutical company Actelion for roughly $30 billion in a deal that would give the U.S.-based health care products giant increased access to rare disease treatments and other biotech medications.

Terms of the all-cash tender deal call for J&J to pay $280 per share for Actelion's outstanding stock in a deal in which the Swiss company's research and development unit would be spun off into a stand-alone company that would continue to be based in Switzerland. J&J said it would fund the transaction with cash it holds outside the U.S.

The deal is aimed at helping the New Jersey-based maker of Band-Aids and prescription drugs increase its medicines portfolio and late-stage medications in a complementary fit with Actelion, a leader in treatments for pulmonary arterial hypertension.

J&J predicted that the deal, expected to be completed in this year's second quarter pending regulatory approval, would immediately boost its earnings per share and revenues. J&J shareholder approval is not required, the company said.

Shares of J&J closed down fractionally at $111.84 in Thursday trading. Actelion shares ended the day nearly 20% in trading on the Swiss SIX Exchange.

Before completion of the acquisition, Actelion is scheduled to spin out its drug discovery operations and early-stage clinical development assets into a new Swiss biopharmaceutical firm, the companies said. Shares of the new entity would be listed in Switzerland and would be distributed to Actelion’s shareholders as a stock dividend when the tender offer closes.

J&J will initially hold 16% of the new entity's shares and have rights to an additional 16% of the spin-off's equity through a convertible note.

The transaction's structure will improve the U.S. company's effective tax rate because Actelion benefits from a comparatively lower rate in Switzerland, Dominic Caruso, J&J's chief financial officer, told investors during a Thursday conference call.

The spin-off company will be led by Actelion’s current scientific team, the companies said. Actelion CEO Jean-Paul Clozel will become the new firm's CEO, while Actelion board chairman Jean-Pierre Garnier will chair the spin-off's board.

J&J raises 2016 profit outlook

J&J said Actelion's pulmonary arterial hypertension therapies complement the U.S. company's existing portfolio through its Janssen Pharmaceutical Companies. J&J will also get an option on a new hypertension product that's currently undergoing phase 2 clinical development testing, the company said.

"We believe Actelion is a strategically compelling transaction for Johnson & Johnson our shareholders, Alex Gorsky, J&J's CEO and Chairman, said during the investor call. "It's the right deal, at the right time with the right partners."

Garnier predicted the deal would benefit Swiss firm's investors by enabling them to "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."

Contributing: Associated Press

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc