Johnson and Johnson bid for Dutch biotech company Crucell
Release Date: 2010-10-25
The US-based healthcare multinational Johnson&Johnson is in advanced talks to buy the Dutch global biopharmaceutical company Crucell which focuses on R&D, production and marketing of vaccines and antibodies. The €1.75 billion ($US2.3 billion) bid values Crucell at €24.75 per share, which is a €0.39 premium over current market value.
Crucell is one of the two major independent vaccine producers in Europe alongside the Austrian company Intercell. Crucell has evolved over the years from a small biotech company into a significant player in the vaccines market with great future potential in terms of new products and a strong cash position. It currently produces vaccines for paediatric, travel, endemic and respiratory uses.
According to The Business Spectator, J&J already acquired 17.9% of Crucell in September 2009 as part of a flu vaccine development deal. The ongoing acquisition will offer J&J a solid position in the global vaccine market. which has tripled over the last five years and is no longer seen as a commodity low margins business, as assessed by Datamonitor studies. The primary advantages that Crucell offers J&J are low patent risks and the possibility of marketing a blockbuster vaccine.
The potential acquisition is seen by Crucell’s management as a way of enhancing growth and advancing potential in delivering healthcare solutions. "I am looking forward to Crucell becoming a Johnson & Johnson company. I am particularly excited that, by retaining our innovative and entrepreneurial culture and dedicated employees, combined with the strength of Johnson & Johnson, we can further accelerate and expand our product and pipeline development, as well as our ability to provide vaccines to people around the world," says Ronald Brus, CEO of Crucell in an October 6 press release.
Vaccines are becoming an interesting field for companies such as J&J, Pfizer and Novartis since they offer an entry into emerging markets. In the case of Crucell, vaccinations reach millions of children in developing countries every year. "Johnson & Johnson and Crucell share a commitment to improving the lives of people worldwide," says Paul Stoffels, the global head of Pharmaceutical Research and Development in Johnson & Johnson in the aforementioned press release .
If the acquisition is finalized, J&J is expected to maintain Crucell’s current employment levels and retain the same senior management in its Leiden, Netherlands headquarters.
An existing condition in the partnership between Crucell and Swiss giant Novartis for supplying childhood vaccines prohibits the Dutch company from accepting bids from several multinationals such as GlaxoSmithKline and Sanofi- Aventis. Nevertheless, Novartis and Pfizer are still considered to be potential bidders.
Although Van Herk Groep – the Dutch group that owns a 9.6% stake in Crucell’s operations – has officially declared that the J&J offer does not look very attractive to them, the chances for success of this offer are high say market analysts. Furthermore, the deal is expected to close by the end of this year according to Crucell management: "With the help of Johnson & Johnson we can increase our reach throughout the world significantly," Brus states in a Reuters interview in the early phases of the takeover (September 16th). "Together we feel we form a very strong team."
| Type: | MEDIA |