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Johnson & Johnson to Buy Momenta Pharmaceuticals for $6.5 Billion

J&J will buy Momenta Pharmaceuticals for roughly $6.5 billion in cash, paving the way for its Janssen unit to expand its efforts into autoimmune disease treatments.

Johnson & Johnson  (JNJ) - Get Johnson & Johnson Report said Wednesday that it will buy Momenta Pharmaceuticals  (MNTA) - Get Momenta Pharmaceuticals, Inc. Report for roughly $6.5 billion in cash, paving the way for the company to expand its efforts into autoimmune disease treatments.

J&J will pay $52.50 for each Momenta share, the company said in a statement, a 70.4% premium to Momenta's closing price Tuesday. Shares of Momenta surged on the announcement, gaining nearly 70%, or $21.32 a share, to $52.12 in trading on Tuesday.

Momenta will become part of J&J’s Janssen Pharmaceutical unit, the companies said, with Janssen acquiring Momenta’s pipeline of clinical assets. Janssen plans to retain Momenta's presence in Cambridge, Massachusetts.

"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.

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The transaction will include global rights to nipocalimab (M281), a clinically validated anti-FcRn antibody, with J&J noting that plans for additional assets in the Momenta pipeline “will be determined as more data become available, and could offer further upside potential.”

Momenta focuses on treating rare autoantibody-driven diseases including Myasthenia Gravis, Hemolytic Diseases of the Fetus and Newborn, warm Autoimmune Hemolytic Anemia. With an autoantibody-driven disease, the body's antibodies attack or damage its own proteins, cells and tissues, often with devastating consequences. 

The deal is expected to close in the second half of 2020. While the deal is expected to have a per-share impact of approximately 10 to 15 cents in 2021, J&J said costs related to the development of Momenta’s portfolio are expected to be “incremental.” 

 Shares of J&J were up 0.49% at $150.82 in trading on Wednesday.