J&J agrees $14.6bn takeover of CNS biotech Intra-Cellular
Johnson & Johnson has agreed to take over Intra-Cellular Therapies in a deal worth up to $14.6 billion – the second biopharma M&A announcement today.
The $132-per-share agreement comes a few months after Intra-Cellular reported phase 3 results with its only commercial product Caplyta (lumateperone) that could dramatically expand its market. Shares in Intra-Cellular had rocketed by more than a third to more than $128 at the time of writing.
Caplyta is already approved by the FDA to treat schizophrenia and bipolar depression as monotherapy and in combination with lithium or valproate, but has also shown efficacy in major depressive disorder (MDD), a larger indication that RBC Capital Markets analysts think could drive sales above $3 billion a year.
To put that in perspective, Intra-Cellular has estimated that Caplyta will have brought in $665 million to $685 million in sales in 2024.
J&J is already a player in the market for drugs to treat resistant MDD with nasal spray antidepressant Spravato (esketamine), which made $780 million in the first nine months of 2024, along with seltorexant, which is in phase 3 for insomnia associated with depression.
"This acquisition further differentiates our portfolio, serves as a strategic near- and long-term growth catalyst for J&J, and offers compelling value to patients, health systems, and shareholders," commented the company's chief executive, Joaquin Duato.
Intra-Cellular filed for approval of the drug as an add-on treatment for standard antidepressants in December, based on the results of two phase 3 trials (Study 501 and 502).
The two studies showed that a once-daily oral dose of Caplyta achieved a significant improvement in the Montgomery–Åsberg Depression Rating Scale (MADRS) at week six compared to placebo in patients who were unable to get sufficient benefit from standard therapies alone.
The M&A agreement is the second to be revealed at this week's JP Morgan healthcare conference, which generally sees a flurry of M&A deals. J&J's announcement came just hours after GSK confirmed it had agreed a $1 billion deal to buy cancer biotech IDRx and its KIT inhibitor for gastrointestinal stromal tumours (GIST).
If completed, the Intra-Cellular takeover would be the largest pharma-biotech merger since Pfizer acquired Seagen for $43 billion at the end of 2023.
Caplyta is a first-in-class drug that acts on three neurotransmitter systems – dopamine, serotonin, and glutamate – and seems to have a faster onset of action than conventional antidepressant drugs, which can take weeks to have a mood-elevating effect.
It is a rival to AbbVie's Vraylar (cariprazine), which also started out as a treatment for schizophrenia and bipolar disorder and added adjunctive therapy of MDD to its label in 2022 and brought in $2.3 billion in the first nine months of 2024, as well as Axsome's Auvelity (dextromethorphan/bupropion), which made just under $200 million in the same period.
The acquisition also includes ITI-1284, a deuterated form of lumateperone being studied in phase 2 as a treatment for generalised anxiety disorder (GAD) and Alzheimer’s disease-related psychosis and agitation, as well as other clinical-stage candidates.
News of the agreement with J&J also comes shortly after Intra-Cellular settled a patent litigation dispute with Sandoz over Caplyta. The settlement gives Sandoz rights to generic versions of Caplyta in the US, but only after 1st July 2040 (or earlier in certain circumstances). Other patent litigation remains pending in the US.
