J&J rumoured to be sizing up $12bn Genmab acquisition

Speculation is mounting that Johnson & Johnson could buy its Danish R&D partner Genmab, a pairing that has created the successful blood cancer drug Darzalex.

J&J this year bought Swiss biotech Actelion for $30 billion, and the US firm’s close relationship with Genmab has led some to suggest that another acquisition is on the cards.

Reuters reported that investors think that such a deal could be worth in the region of $12 billion.

Under the terms of the deal J&J sells Darzalex (daratumumab), which is approved by the FDA in three multiple myeloma indications, and has been on the market since 2015.

Sales are already at blockbuster level but analysts expect them to reach more than $8 billion.

This means the 12-20% royalty that J&J pays to Genmab is adding up to serious money, with sales expected to pick up as the drug is approved in other uses.

Reuters reported that Berstein analyst Wimal Kapadia is among those who think J&J may decide to buy Genmab to avoid paying the royalty, and bring in a group of scientists with a strong track record in drug development.

J&J’s chief scientific officer Paul Stoffels told Reuters: “It’s one of the most successful collaborations we have. We love the partnership.”

Genmab has also received a string of milestone payments from J&J because of Darzalex – only last week it got $20 million because of progress made in a phase 3 study in amyloidosis.

The payment related to the ANDROMEDA study where Darzalex is combined with cyclophosphamide, bortezomib, and dexamethasone in the rare disease.

Also this month Genmab got $50 million because sales of Darzalex broke through the $1bn a year mark, and a separate $25 million payment for the first commercial sale of Darzalex in Japan.

Reuters reported that Genmab’s chief executive Jan van de Winkel said any decision on a sale would be decided by shareholders – but said he is focused on the biotech’s future as an independent company.

J&J is under pressure to find new revenues because of falling sales of its inflammatory diseases blockbuster Remicade.

This was the logic behind the Actelion acquisition, as the Swiss biotech has a series of drugs approved in the rare disease pulmonary arterial hypertension.

Jan van de Winkel

He agreed with analysts that if J&J is looking at Genmab, it would be for very different reasons. But for now van de Winkel is very happy with the partnership.

“It is up to J&J ... but I hope that we can continue like this for many, many more years," he told Reuters