The FINANCIAL — U.S. health care products maker Johnson & Johnson Inc. has bought an 18 percent stake in Dutch biotechnology company Crucell NV for euro301.8 million as part of a deal to collaborate on the treatment and prevention of influenza.
Under the deal, Crucell and J&J's Ortho-McNeil-Janssen Pharmaceuticals will share responsibilities to develop a universal flu-mAb product targeting all influenza A strains, including H1N1 strains, which cause seasonal flu and the current pandemic, and the H5N1 or avian strain, known as bird flu, Market Watch informs.
They will work to discover and develop a universal flu vaccine and up to three vaccines or antibodies against infectious or non-infectious diseases, according to the same source. J&J will be restricted in buying up more Crucell shares for three years, and can't transfer shares for three months. Johnson & Johnson said the deal will hurt this year's earnings by 2 to 4 cents a share.
In a joint statement, the companies said their immediate focus would be on developing "monoclonal antibodies" — which bind to a target protein, alerting the body's own immune system to attack it, AP reported. Crucell was awarded grants worth up to $69 million by the U.S. government in August to develop its range of monoclonal antibodies for influenza, which Crucell says have shown early promise in fighting "a wide range" of seasonal and pandemic flu viruses.
The newly-issued shares represent about 18 percent of Crucell's outstanding ordinary shares. Both companies also agreed to development milestones and royalty payments based on the successful development and commercialisation of products, according to Reuters. "A universal antibody or vaccine that protects against a broad range of strains would be an important advance in helping … control acute epidemic and pandemic outbreaks," said Paul Stoffels, global head of pharmaceuticals R&D at Johnson & Johnson.
In 2008, around 14 million people in the industrialized world were diagnosed with influenza, with millions more being diagnosed in developing regions, Crucell said, The Wall Street Journal reported. "The collaboration with Johnson & Johnson is a good deal for Crucell," says Ilja Zaanen, an analyst at SNS Securities who rates Crucell at Hold. She added, Crucell would not have been able to support the expensive late clinical trials for the antibody influenza vaccine on its own.
In January, Crucell pulled out of friendly takeover talks with U.S.-based Wyeth (WYE), which will merge with Pfizer Inc. (PFE), according to the same source. "The deal between Johnson & Johnson (JNJ) and Crucell (CXRL) is a surprise," said Mutlu Gundogan, analyst at Royal Bank Of Scotland, adding that Crucell doesn't need the money and that the deal makes it less likely Crucell will be acquired in the short-term. RBS rates Crucell at Hold.
Under the deal, Crucell will retain the right to market products the companies develop jointly in Europe, while Johnson & Johnson will market them in the rest of the world, AP wrote. Earlier this year Wyeth entered talks to buy Crucell for $1.35 billion, but it canceled the negotiations after Wyeth itself was bought for $68 billion by Pfizer Inc.
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