Shares of biotechnology company Momenta Pharmaceuticals, Inc. MNTA were up 69.17% after it announced that it will be acquired by pharma giant Johnson & Johnson JNJ for $52.50 per share in an all-cash transaction.
The total value of the transaction comes to $6.5 billion.
The transaction is expected to close in the second half of 2020. The agreement was unanimously approved by the boards of both Momenta and Johnson & Johnson.
The announcement was cheered by the investors as the price of $52.50 represents more than 70% premium to the closing price of $30.81 of Momenta.
The transaction will give Janssen Pharmaceutical Companies of Johnson & Johnson full global rights to Momenta’s nipocalimab (M281), a clinically validated, potentially best-in-class anti-FcRn antibody.
While the acquisition will broaden Johnson & Johnson’s presence in immune-mediated diseases and provide it an opportunity to grow in the autoantibody-driven disease space, Momenta will get the much-needed cash influx and a strong partner to advance its portfolio of novel drug candidates for autoimmune and rare diseases.
Momenta’s novel therapeutics pipeline includes nipocalimab (M281), a fully human anti-neonatal Fc receptor (FcRn) aglycosylated immunoglobulin G (IgG1) monoclonal antibody (mAb) candidate.
Importantly, in June 2020, Momenta announced positive top-line data from an interim analysis of Vivacity-MG, the phase II study of nipocalimab in generalized myasthenia gravis (gMG). The results demonstrated that nipocalimab induced a rapid and durable response in the myasthenia gravis activities of daily living score (MG-ADL) at all doses and met the study’s primary efficacy endpoint, demonstrating a linear and highly statistically significant (p<0.0001) relationship between Immunoglobulin G (IgG) reduction and MG-ADL clinical benefit. The study is expected to be completed in the third quarter of 2020 and Momenta intends to present the full 16-week data in the fourth quarter of 2020. Additionally, Momenta has begun preparations to conduct an end of phase II meeting with the FDA before the end of 2020 and anticipates initiating a phase III study in the first quarter of 2021.
Additionally, Unity, Momenta’s global multi-center phase II study of nipocalimab in hemolytic disease of the fetus and newborn (HDFN), continues to enroll patients at sites where they can be safely accommodated.
While there are other promising candidates in the pipeline, nipocalimab’s positive phase II study results have grabbed the spotlight.
Momenta’s stock has rallied 164.1% in the year so far compared with the industry’s growth of 2.7%.
We believe the deal is positive for Momenta, given JNJ’s expertise in immunology and extensive capabilities, which gives the former a chance to turn over a new leaf with the successful development of the candidates.
The deal comes close on the heels of Sanofi’s SNY announcement to acquire Principia Biopharma Inc. PRNB, a late-stage biopharmaceutical company focused on developing treatments for immune-mediated diseases for $3.68 billion.
Momenta currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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