J&J pays $6.5bn for Momenta and its inflammatory disease hopeful

Janssen J&J Johnson and Johnson pharmaceutical companies

Johnson & Johnson is to buy Momenta Pharmaceuticals for $6.5 billion, adding potential inflammatory diseases blockbuster nipocalimab to the pipeline at its Janssen pharmaceuticals unit.

J&J thinks that Momenta’s lead drug nipocalimab could be a kind of Swiss army knife drug that could be used across a range of inflammatory diseases including maternal-foetal disorders, neuro-inflammatory disorders, rheumatology, and autoimmune haematology.

The success of AbbVie’s Humira (adalimumab), which peaked at almost $20 billion in sales in 2018, demonstrates the potential of inflammatory diseases drugs to make mega-bucks.

Johnson & Johnson’s own Remicade (infliximab) was also a blockbuster several times over thanks to approvals in a range of inflammatory diseases including Crohn’s, rheumatoid arthritis and psoriasis.

But like the rest of this first generation of antibody-based drugs, Remicade has been hit by cheaper competition from biosimilars and the hunt is on for newer drugs that outperform standard therapy in terms of safety and efficacy.

Whether nipocalimab achieves the astronomical figures seen from Humira and Remicade remains to be seen – but the price J&J has paid shows the big pharma thinks it has considerable potential.

Momenta is best known for producing a generic version of Teva’s multiple sclerosis drug Copaxone (glatiramer), but nipocalimab is the company’s lead pipeline asset and the main rationale behind the acquisition.

Nipocalimab works against the neonatal Fc Receptor, a protein that can cause pathogenic antibodies to linger in the body and is thought to play a role in inflammatory diseases.

Diseases driven by the body’s own antibodies include myasthenia gravis, haemolytic diseases of the foetus, newborn, warm autoimmune haemolytic anaemia and a host of other conditions.

Around 2.5% of the population, around 195 million people worldwide, suffer from some form of autoantibody-driven disease, many of which are orphan and rare diseases.

Janssen thinks that individual indications could exceed $1 billion, as it looks to outgrow the pharma market in the long term.

The company said that while the deal is focused on nipocalimab, Momenta’s other approved drugs and pipeline assets will be assessed as more data becomes available.

Nipocalimab has recently received a rare paediatric disease designation from the FDA and the transaction will include full global rights to nipocalimab.

The transaction valuing Momenta at $52.50 per share is expected to close in the second half of 2020, subject to clearance by US antitrust regulators.

The costs are expected to increase J&J’s R&D spend, shaving off around $0.1-$0.15 from earnings per share in 2021.