After slowing in the past few months, the pace of biopharma mergers and acquisitions quickened Wednesday morning as Johnson & Johnson said it will acquire Momenta Pharmaceuticals Inc. in a $6.5 billion all-cash deal.
Momenta’s stock (NASDAQ:MNTA) rallied strongly on the news, up a dramatic 69% in premarket trading, with shares valued at about $52 each. Johnson & Johnson plans to purchase all outstanding Momenta shares for $52.50 each. The transaction’s $6.1 billion estimated net value is based on Momenta's estimated fully diluted shares outstanding, less estimated net cash at closing, which is set for some time before 2020 ends.
Bringing Momenta into the fold strengthens the Janssen Pharmaceutical Companies of Johnson & Johnson’s immune-mediated disease portfolio and grows its interest in autoantibody-driven disease therapies. Roughly 2.5% of the world’s population, 195 million people, have some form of autoantibody-driven disease.
Janssen said the acquisition offers the potential for multiple launches, many as first-in-class indications with potential for significant peak year sales, some of which the company believes could exceed $1 billion.
A massive part of the deal is full global rights to Momenta’s nipocalimab, an G1 anti-FcRn monoclonal antibody that gives Janssen a wide path to further develop autoimmune disease therapies in maternal-fetal disorders, neuro-inflammatory disorders, rheumatology, dermatology and autoimmune hematology.
Top-line phase II data from an interim analysis of nipocalimab (M-281) in treating generalized myasthenia gravis released in mid-June showed efficacy in the activities of daily living (MG-ADL) score, which was the primary endpoint. Slightly more than half of patients had rapid, significant and durable reductions in MG-ADL scores, at least a 2-point reduction from baseline for at least four consecutive weeks across all four dosing arms vs.15% for placebo (p=0.017).
Nipocalimab is also being developed by Momenta to prevent hemolytic disease of the fetus and newborns. The FDA granted nipocalimab rare pediatric disease designation and orphan status in late July.
“Given the work in the space is spearheaded by smaller players, this deal confirms pharma interest in this novel target and the broad applicability of anti-FcRn,” Guggenheim Partners analyst Yatin Suneja wrote Wednesday morning. “We see room for many players.”
One of those players is Argenx SE, of Breda, the Netherlands, which in early July set a new highwater mark for a follow-on offering by a publicly listed European firm, raising $863 million, including the overallotment option, on the back of positive data from a pivotal phase III trial of the anti-neonatal-Fc-receptor antibody fragment efgartigimod in generalized myasthenia gravis. It smashed the previous record of $575 million, which rare disease drug developer Ascendis A/S, of Hellerup, Denmark, raised last year.
Janssen said it will keep Momenta’s Cambridge, Mass., location, adding to Johnson & Johnson’s presence in the Boston area.
Mergers and acquisitions have waned in 2020, with the Abbvie Inc.’s $63 billion acquisition of Allergan plc in May carrying more than half of the year’s total M&A value.
The 73 completed biopharma M&As so far this year are valued at $121.3 billion. In June, there were 12 completed M&As worth $3.65 billion, which is the second lowest amount for a month in 2020, ahead of February’s $2.97 billion from eight completed M&As. The value of 2020 M&As during the first six months, however, is ahead of where each of the last three years were by the end of June, although the number of M&As is behind 2019.
There was a sharp drop in M&A value going from May to June due to the Abbvie-Allergan deal recorded in May when a total of 17 M&As worth $63.24 billion were completed. It is the highest value and volume month for the year.
The largest completed M&A in June was Novo Nordisk A/S’ acquisition of Corvidia Therapeutics Inc. for $2.1 billion. Other large M&As in June were The Menarini Group’s purchase of Stemline Therapeutics Inc. for $677 million and PTC Therapeutics Inc.’s buyout of Censa Pharmaceuticals Inc. for $526 million. UCB SA also acquired Engage Therapeutics Inc. in June for $270 million.