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Why Momenta Pharmaceuticals Stock Rocketed 69% Higher Today

By Joe Tenebruso – Aug 19, 2020 at 1:01PM

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A healthcare titan is acquiring the biotech in a $6.5 billion deal.

What happened

Shares of Momenta Pharmaceuticals (MNTA) soared on Wednesday after the biotechnology company announced it had agreed to be acquired by Johnson & Johnson (JNJ 0.86%). As of 1:40 p.m. EDT, Momenta's stock was up 69%. 

So what 

The all-cash deal values Momenta at $6.5 billion, or $52.50 per share -- a 70% premium to its stock's closing price on Aug. 18. In return, J&J would receive full global rights to Momenta's experimental antibody, nipocalimab, which could potentially be used to treat a number of autoimmune diseases. J&J would also obtain Momenta's pipeline of clinical and pre-clinical assets. 

JNJ believes that sales for nipocalimab alone could eventually exceed $1 billion annually. 

A person in a business suit is pointing to an upwardly sloping stock chart.

Momenta Pharmaceuticals' stock surged on news of its acquisition deal with Johnson & Johnson. Image source: Getty Images.

"This acquisition provides strong value for our shareholders and ensures a level of investment in our exciting portfolio that will further enhance its potential for patients," Momenta CEO Craig Wheeler said in a press release. 

Now what

Acquiring Momenta would allow J&J to strengthen its position in the field of immune-mediated diseases and expand into new markets. J&J executive vice president Jennifer Taubert said the deal would provide the healthcare giant with "a major catalyst for sustained growth" as it enters the autoantibody-driven disease market. 

"Autoantibody-driven diseases are often serious, and patients are underserved by current treatment options," Taubert said. "We're excited by the opportunity to further advance patient care by combining Johnson & Johnson's world-class R&D, commercial, and supply chain capabilities with Momenta's talented people, pipeline, and deep expertise in this important area."

The deal is expected to close in the second half of 2020.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson and Momenta Pharmaceuticals. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Momenta Pharmaceuticals, Inc. Stock Quote
Momenta Pharmaceuticals, Inc.
MNTA
Johnson & Johnson Stock Quote
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