Johnson & Johnson buys oncology drug developer for $2 billion

Johnson & Johnson announced on the acquisition of Ambrx Biopharma, which develops drugs for the treatment of cancer. J&J will pay $28 in cash for each share of the American developer, which is double their value at the close of trading on Friday, January 6. Thus, the transaction amount will be about $2 billion.

Ambrx has a patented technology for creating toxin immuno-conjugates – drugs that do not affect all tissues of the body, as is the case with traditional chemotherapy, but only tumor cells.

After the deal was announced, Ambrx shares doubled in over-the-counter trading. The parties hope to close the deal in the first half of this year.

J&J CEO Joe Wolk previously said his company was open to acquisitions. In 2025, the company’s patent for its best-selling drug, Stelara for psoriasis, will expire, after which its generics will begin to enter the market, which will definitely reduce sales of the original drug.

Toxin immunoconjugates, in turn, are one of the most sought-after innovative drugs on the market, and therefore large pharmaceutical corporations willingly acquire their developers. So, last year AbbVie agreed to acquire Cerevel Therapeutics for $8.7 billion, and Bristol Myers Squibb will pay up to $8.4 billion for the rights to co-develop and market an experimental lung and breast cancer drug with SystImmune. Finally, Merck & Co. paid $22 billion for the rights to market three experimental drugs from Daiichi Sankyo.

Kirill Sarkhanyants