In a major move to bolster its presence in the brain disease treatment market, Johnson & Johnson (J&J) has announced its plan to acquire Intra-Cellular Therapies (ITCI) for $14.6 billion, marking the company’s largest deal in over two years. This acquisition is set to accelerate growth in J&J’s pharmaceutical division following the 2023 spin-off of its consumer health unit.
The deal aligns with J&J’s strategy to expand its portfolio of neurological drugs. By acquiring Intra-Cellular, J&J gains access to Caplyta, an oral therapy approved for treating schizophrenia and depressive episodes related to bipolar disorder, along with other promising experimental treatments in development. Caplyta has already generated impressive sales, bringing in $481.3 million in the first nine months of 2024, and analysts project it will surpass $1 billion in sales next year.
Joaquin Duato, CEO of J&J, noted that such large-scale acquisitions are rare for the company, emphasizing the strategic importance of the deal. “These deals do not happen every day, and larger deals are more outliers for us,” Duato said during a major industry conference in San Francisco.
Under the terms of the acquisition, J&J will pay $132 per share of Intra-Cellular, a 39% premium over the stock’s recent closing price. Following the announcement, Intra-Cellular’s stock surged by 34%, while J&J saw a modest 1.5% rise.
While many analysts view the deal as a strategic fit for J&J’s neurological drug portfolio, concerns have emerged regarding potential antitrust issues. Some investors, including Jeff Jonas of Gabelli Funds, have raised questions about overlap in the companies’ product lines, particularly as J&J already has drugs for schizophrenia and depression in its pipeline.
Despite these concerns, J&J expects the transaction to close later this year. The deal will be funded through a combination of cash on hand and debt, with J&J remaining committed to smaller acquisitions as part of its overall growth strategy.
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