The European Commission has issued a conditional green light for Johnson & Johnson's planned $30 billion purchase of Actelion, laying out the commitments it feels are necessary to ensure that clinical development of the firms' innovative insomnia drugs will not be adversely affected by the merger.
J&J and Actelion are both developing treatments in this area, both of which are based on a novel mechanism of action. No other treatments of this kind are currently marketed in the European Economic Area and only a very limited number of medicines with this new mechanism of action are currently in development.
Therefore, the Commission concluded that there would not be a sufficient level of competition if one of the two research and development programmes were discontinued after the merger.
Actelion's insomnia research programme is to transferred before the merger to Idorsia, a newly created company in which J&J would have a minority shareholding of up to 32 percent. But the EC’s investigation found that the drug giant could still have influenced Actelion's strategic decisions since it would be an important shareholder and finance provider of Idorsia.
Thus, it has ordered that J&J’s stake in Idorsia be kept below 10 percent, or up to 16 percent provided that J&J is not the largest shareholder, and a commitment not to nominate any board member, in order to limit the firm’s potential influence.
Also, J&J will remove its incentives to negatively influence the development of its own insomnia research programme, by granting co-development and commercialisation partner Minerva Neurosciences new rights over the global development and waiving its royalty rights on Minerva's sales in the EEA.
“Effective competition is important to stimulate research and development of innovative drugs, to the benefit of patients and our healthcare systems. Our decision makes sure that the development of innovative insomnia drugs will continue following the Johnson & Johnson and Actelion merger,” noted Commissioner Margrethe Vestager.
All regulatory approvals required to complete the transaction between J&J and Actelion have been received.