J&J doubles down on nerve drugs with $14.6 billion Intracellular deal
By Bhanvi Satija and Puyan Singh
(Reuters) – Johnson & Johnson said on Monday it would buy neurological drugmaker Intra-Cellular Therapies for $14.6 billion, its biggest deal in more than two years, boosting its presence in the market for psychiatric treatments.
The agreement is that the company After spinning off its consumer health unit in 2023, it will help accelerate growth in J&J’s pharmaceutical business. Over the past few years, it has made several transactions to grow its pharmaceutical and medical device divisions, including a $13.1 billion deal for Shockwave Medical in 2024.
“These deals don’t happen every day, and frankly, for us, the big deals are more outlandish,” J&J CEO Joaquin Duato said at a major industry conference that began Monday in San Francisco.
Bankers expect more deals at the conference and overall by 2025, after President-elect Donald Trump takes office on Jan. 20, betting activity could top $10 billion with minimal antitrust scrutiny.
J&J is offering to buy each Intra-Cellular share for $132, which represents 39% of the stock’s closing price Friday. Intra-Cellular shares rose 34 percent to $128 in afternoon trading, while J&J rose 1.5 percent.
The deal gives J&J access to Caplyta, Intra-Cellular’s oral therapy approved in the US to treat schizophrenia and bipolar disorder and other experimental drugs in development.
Caplita brought in $481.3 million in sales in the first nine months of 2024, and some analysts don’t expect it to face full competition until 2040. Analysts expect the treatment to generate more than $1 billion in sales next year, according to data compiled by LSEG. .
RBC Capital analyst Shagun Singh said the deal is strategically aligned with J&J’s neuropharmaceuticals division, which is an important position for the company.
But at least one investor raised concerns that it could face a tougher antitrust review.
“I have a lot of antitrust concerns about this deal,” said Jeff Jonas, portfolio manager of the Gabelli Fund, which owns 193,035 shares of J&J.
Jonas said there is overlap in the two companies’ products, with J&J having a late-stage depression drug and a schizophrenia treatment already on the market.
The assumption that J&J will close the deal “by the end of this year” seems to involve a serious review even under the new administration, he said.
The healthcare giant’s schizophrenia drug paliperidone, sold under multiple brand names such as Invega and Xeplion, brought in $3.16 billion in sales in the first nine months of 2024.