Johnson & Johnson to Acquire Momenta

Johnson & Johnson has entered into a definitive agreement to acquire Momenta Pharmaceuticals, a company that discovers and develops novel therapies for immune-mediated diseases, in an all cash transaction for approximately $6.5 billion.

The transaction will include full global rights to nipocalimab (M281), a clinically validated, potentially best-in-class anti-FcRn antibody. Nipocalimab gives Janssen the opportunity to reach more patients by pursuing indications across many autoimmune diseases with substantial unmet medical need in maternal-fetal disorders, neuro-inflammatory disorders, rheumatology, dermatology and autoimmune hematology. Nipocalimab recently received a rare pediatric disease designation from the U.S. Food and Drug Administration (FDA). Momenta's knowledge in FcRn mechanisms is especially important for nipocalimab as it supports and accelerates the development of a medicine designed to target a number of autoantibody-driven conditions across several of Janssen's established therapeutic areas. Janssen expects nipocalimab to contribute to its goals of achieving above-market growth over the mid and long term.

Autoimmune diseases driven partially or completely by autoantibodies represent a novel area where Janssen can significantly improve health outcomes for patients. In autoantibody-driven diseases, the body's antibodies attack or damage its own proteins, cells and tissues, often with devastating consequences. Autoantibody-driven diseases include Myasthenia Gravis, Hemolytic Diseases of the Fetus and Newborn, warm Autoimmune Hemolytic Anemia, and other serious dermatologic, rheumatic, neurologic, hematologic and renal diseases. An estimated 2.5 percent of the population, or approximately 195 million people worldwide, suffer from some form of autoantibody-driven disease, many of which are orphan and rare diseases.

With competitively differentiated, parallel development programs and full worldwide commercial rights for nipocalimab, Janssen will have the potential to introduce multiple  launches, many as first-in-class indications with potential for significant peak year sales, some of which could exceed $1 billion, supporting Janssen's goal of continuing to deliver above-market performance over the long term.

"This acquisition broadens Janssen's leadership in autoimmune diseases and provides us with a major catalyst for sustained growth. Autoantibody-driven diseases are often serious, and patients are underserved by current treatment options," said Jennifer Taubert, Executive Vice President, Worldwide Chairman, Pharmaceuticals, Johnson & Johnson. "We're excited by the opportunity to further advance patient care by combining Johnson & Johnson's world-class R&D, commercial and supply chain capabilities with Momenta's talented people, pipeline and deep expertise in this important area."

In addition to Momenta's employees and lead asset nipocalimab, Janssen will acquire Momenta's pipeline of clinical and pre-clinical assets. The acquisition was driven by the significant opportunity seen in nipocalimab, along with the scientific capability Janssen is acquiring with the Momenta team. Janssen's plans for additional assets in the Momenta pipeline will be determined as more data become available and could offer further upside potential.

"Nipocalimab, and the rest of Momenta's pipeline, built over many years by outstanding scientists who have turned important insights into actionable biology, expands and complements our portfolio by giving us clinical-stage and discovery-stage compounds in autoantibody biological pathways. Combining Momenta's discoveries with our 20-year heritage in immunology, global scope, and scientific and medical expertise, we see a real opportunity to create an entire 'pipeline in a pathway,'" said Mathai Mammen, M.D., Ph.D., Global Head of Janssen Research & Development, Johnson & Johnson. "We are excited about the significant potential to expand on Momenta's excellent progress in rare diseases, and to increase our impact on patients both within and beyond our current focus areas."

Janssen plans to retain Momenta's presence in Cambridge, Massachusetts.

Under the terms of the transaction, which was approved by the Boards of Directors of both companies, Vigor Sub, Inc. (Merger Sub), a newly formed wholly-owned subsidiary of Johnson & Johnson, will commence a tender offer to purchase all outstanding shares of Momenta for $52.50 per share. The closing of the offer is conditioned on the tender of a majority of the outstanding shares of Momenta's common stock on a fully diluted basis, as well as clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. The $6.1 billion estimated net value of the transaction is based on Momenta's estimated fully diluted shares outstanding, less estimated net cash at time of closing. Assuming the closing of the tender offer, the Company will acquire any shares of Momenta not tendered into the tender offer through a merger of Merger Sub with and into Momenta for the same per share consideration as will be payable in the tender offer. The merger will be effected as soon as practicable after the closing of the tender offer. Following completion of the merger, Momenta's common stock will no longer be listed for trading on the NASDAQ Global Select Market.

The transaction is expected to close in the second half of 2020. While the closing of the transaction is expected to be modestly dilutive, the Company is maintaining its current 2020 Adjusted EPSi guidance range. Looking ahead, the costs associated with the development of Momenta's portfolio are expected to be incremental to planned R&D investment levels over the next few years given the value creation potential of our current portfolio, and thus expect this incremental investment in R&D to have an EPS impact worth approximately $0.10-$0.15 in 2021. The transaction will be accounted for as a business combination.