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JNJ To Buy Momenta Pharma In $6.5B All-Cash Deal; MNTA Up 70%
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JNJ To Buy Momenta Pharma In $6.5B All-Cash Deal; MNTA Up 70%

Johnson & Johnson (JNJ) has agreed to buy Momenta Pharma (MNTA), a biotech focused on discovering and developing novel biologic therapeutics for rare immune-mediated diseases, for $52.50 per share in an all-cash transaction.

This implies a fully-diluted equity value of $6.5 billion- and represents a 70% premium from Momenta’s closing price on August 18 of $30.81. Shares in Momenta are now surging 70% in Wednesday’s pre-market trading.

The agreement was unanimously approved by the Boards of Directors of both Momenta and Johnson & Johnson.

“Programs such as nipocalimab have the potential to improve the lives of countless patients suffering from autoimmune and fetal maternal diseases,” said Craig Wheeler, CEO of Momenta. “I believe J&J is the right company to advance our portfolio of novel drug candidates for autoimmune and rare diseases.”

The transaction is expected to close in the second half of 2020, and until then Momenta will operate as a separate and independent company. 

Indeed, Momenta scores a bullish Strong Buy Street consensus, with seven recent buy ratings vs 2 hold ratings. Similarly, JNJ scores only buy ratings from the Street giving it a Strong Buy consensus. Its average analyst price target of $167 indicates 11% upside potential lies ahead, with shares up 3% year-to-date.

HC Wainwright analyst Douglas Tsao is optimistic about the outlook for Momenta’s pipeline, noting that the company has now completed enrollment in part B of a Phase 1/2 study for M254 in idiopathic thrombocytopenic purpura (ITP).

“Given the strong preclinical data, and what we have seen from earlier trial readouts, we remain confident in M254’s success” he commented on August 11. And in respect of nipocalimab, he notes that it is poised for key catalysts in the near term with a pivotal trial in myasthenia gravis (MG) to initiate in 1Q21.

Tsao writes:Though nipocalimab won’t be the first to market in MG, we envision its best in class anti-FcRn lowering, and fast IV infusion expected on a fixed schedule, to result in eventual market leadership.”(See JNJ stock analysis on TipRanks).

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