In the wake of Sanofi’s USD 3.7 billion tie-up for US biotech Principia, J&J has moved to bolster its autoimmune portfolio with the acquisition of Momenta Pharmaceuticals for USD 6.5 billion, a further signal of Big Pharma’s prioritisation of rare disease treatments.
The all-cash deal sees J&J’s pharmaceutical division Janssen gain access to Momenta’s full product pipeline, including promising treatment nipocalimab. The drug is currently approved for the rare muscular disease myasthenia but is also being tested on other disorders of the autoimmune system.
Momenta, founded in the early 2000s by Ram Sasisekharan of the Massachusetts Institute of Technology and Ganesh Venkataraman Kaundinya, started out developing generic versions of drugs already approved by the US FDA. In 2019 the company reported a USD 290 million annual loss and just USD 23.9 million in revenues.
J&J has not engaged in such a large-scale acquisition since its USD 30 billion deal for Swiss biotech Actelion in 2017. In 2019, the company bought up Auris Health, a robotics platform, for USD 3.4 billion.
Analysts are seeing J&J’s latest move as a sign of the times in terms of Big Pharma’s prioritisation of rare disease treatments which often have far higher margins than traditional mass-market drugs. As well as the Sanofi deal for Principia, Japanese firm Takeda recently moved to divest several ‘non-core’ primarily OTC assets in the Asia-Pacific region in order to focus on oncology, gastroenterology (gi), neuroscience, and rare diseases and is shedding its consumer health unit to private equity group Blackstone for USD 2.3 billion.
In a statement, J&J noted that “The acquisition was driven by the significant opportunity seen in nipocalimab, along with the scientific capability Janssen is acquiring with the Momenta team.”
The COVID-19 pandemic has hit J&J’s net earnings by more than a third through delays to elective procedures and lower sales of medical devices and beauty products. However, the company is optimistic that drug sales will pick up again and that its experimental COVID-19 vaccine – for which the US government recently agreed a USD one billion deal for 100 million doses – will help herald a return to growth.