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%.
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.
"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.
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.