* Need for premium could lift price to $26 bln, analysts say
* J&J has had preliminary talks with Swiss biotech firm
* Actelion could also appeal to deal-hungry Sanofi
By John Miller
ZURICH, Nov 28 Actelion Chief Executive
Jean-Paul Clozel's desire to keep Europe's biggest biotech
company independent after building it from scratch, means
Johnson & Johnson will have to pay a steep premium if a
takeover is to succeed.
The U.S. healthcare titan on Friday confirmed talks with the
Swiss maker of medicines for deadly pulmonary arterial
hypertension (PAH). While Actelion confirmed the courtship, it
said there was no guarantee of a deal.
Actelion's rare-disease focus makes it an attractive target,
since its drugs face less price pressure than other more widely
Analysts estimate a deal could be as high as 250 Swiss
francs ($247) per share, valuing Actelion at around $26 billion,
or $6 billion more than its current price even after the share's
17 percent surge on Friday.
Having fended off reported approaches by Shire in
2015 and hedge fund Elliott Advisors in 2011, Clozel, a
French-born cardiologist, has repeatedly asserted his desire to
go it alone, with his three main PAH drugs and with pipeline
medicines he hopes will create a broad-based biotech company.
This hard-to-get approach, coupled with the high value of
recent deals in the sector, will drive up Actelion's takeover
price, analysts said.
"Similar deals have been at a 40-plus percent premium and we
view 240 Swiss francs as a possible floor takeout value,"
Jefferies analyst Peter Welford said.
Analysts at Bryan Garnier suggested a bid price of up to 250
In another recent biotech takeover, Pfizer paid $14
billion for cancer specialist Medivation, or double its pre-deal
value. Switzerland's Roche in 2014 paid $8.3 billion for
InterMune, a 63 percent premium.
Clozel and his pediatrician-wife, Martine Clozel, Actelion's
chief science officer, own 5 percent of the company they founded
in 1997. Close ties with Actelion's Swiss shareholder base
suggest they can mobilise support, should an offer not live up
to their expectations, Welford said.
If J&J fails to strike a deal, a rival like Sanofi
could well step in, analysts said. Actelion's PAH portfolio is a
potentially nice fit for the French drugmaker's Genzyme rare
Sanofi, which lost out to Pfizer in the battle for
Medivation, has said it is still looking for deals.
A spokesman for Sanofi declined to comment on the company's
possible interest in Actelion.
While the patent for Actelion's PAH blockbuster Tracleer
expired last year, Clozel's two newer PAH drugs, Opsumit and
Uptravi, are expected to take up the slack.
Opsumit's annual sales are set to hit 1.9 billion francs by
2020, according to Reuters data. Uptravi sales could top 2.5
Clozel plans to use the cash to fund his late-stage
pipeline, which includes medicines for treating diarrhea-causing
clostridium difficile, as well as the multiple sclerosis drug
Stefan Schneider, a Bank Vontobel analyst in Zurich, doubts
a deal will go through and said any sign that a potential buyer
will tinker with Clozel's prized pipeline to cut costs could be
a deal killer.
"We don't see how the CEO would part from the pipeline where
he sees the value for Actelion to transform into the first
European large-cap biotech company," Schneider said.
Actelion's shares have risen six-fold to nearly 190 francs
since the start of 2012, just after Elliott tried to wrest
control - on the grounds the company's stock should fetch 70
As retirement edges closer, analysts said it is possible
Clozel is more receptive to handing over the reins, especially
if a buyer agrees to retain Actelion's presence in Basel where
the company, however successful, still plays second fiddle to
giants Roche and Novartis.
"Actelion's shares have risen 400 percent based on the
strength of the PAH portfolio alone," Zuercher Kantonalbank
analyst Michael Nawrath said.
"Even when Clozel has always made the case for independence,
it's possible a stock price at its zenith, combined with his 61
years, could prompt a change of heart."
($1 = 1.0139 Swiss francs)
(Editing by Ben Hirschler and Susan Fenton)