Johnson & Johnson agreed to acquire Intra-Cellular Therapies Inc., a company focused on treatments for central nervous system disorders, for about $14.6 billion.
J&J will pay $132 a share, the company said in a statement. That’s 39% above the closing price on Friday. Bloomberg earlier reported a deal was in the works.
Shares of Intra-Cellular rose 35% to $127.74 at 9:30 a.m. on Monday. The stock had gained about 40% over the last 12 months through Friday’s close, giving the company a market value of roughly $10 billion.
Intra-Cellular develops new treatments for mental health disorders and neurological conditions and is currently working on a drug for major depressive disorder that’s in late-stage trials.
Caplyta expectations
Its stock jumped last week after Intra-Cellular said it entered into a settlement agreement with Sandoz to resolve patent litigation related to Caplyta, its medication for bipolar depression.
Caplyta generated an estimated $675 million in sales last year. J&J said the therapy has the potential to reach $5 billion in annual revenue.
J&J has long been viewed as a likely acquirer of Intra-Cellular, given that both companies have neuroscience drugs, with minimal overlap, according to RBC Capital Markets analyst Brian Abrahams.
“We had always viewed a larger company as potentially even better able to broaden the drug’s sales,” Abrahams said.
Stock slide
J&J is down around 12% over the 12-month period for a market capitalization of $342 billion. Its stock was little changed at the open of trading in New York on Monday.
The transaction will be funded through a combination of cash on hand and debt, J&J said. The purchase is expected to close later this year.
The deal is biotech’s biggest in more than a year. It underscores how health care deals are ramping up again after slumping in 2024, when big pharma players slowed a post-pandemic dealmaking rush to digest acquisitions. This month, medical device maker Stryker Corp. agreed to buy Inari Medical Inc. for about $4.9 billion.
J&J is going back on the offense after spinning off its consumer health division and striking a $13.1 billion takeover last year of heart device maker Shockwave Medical. The company has been working to maintain growth as it faces the loss of exclusivity for the psoriasis treatment Stelara.
Citigroup Inc. and Cravath, Swaine & Moore LLP advised J&J, while Centerview Partners LLC, Jefferies Financial Group Inc. and Davis Polk & Wardwell LLP worked with Intra-Cellular.
