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Published on January 14, 2025
Johnson & Johnson Bolsters Neuroscience Offerings with $14.6 Billion Acquisition of Intra-Cellular TherapiesSource: Google Street View

Pharmaceutical giant Johnson & Johnson has struck a deal to acquire Intra-Cellular Therapies Inc. for a whopping $14.6 billion. The agreement to purchase the biopharmaceutical company will see J&J paying $132 per share, a 39% premium from the previous Friday's closing price. This move is a significant one for J&J, aiming to bolster its portfolio in the neuroscience domain, as per a Crain's New York report.

Intra-Cellular Therapies, known for its central nervous system disorder treatments, has seen its shares increase by about 40% over the last year, evidencing the company's strong market presence. Johnson & Johnson aims to not only expand its neuroscience drug offerings but also to aggressively to drive growth through this acquisition, particularly as it seeks to mitigate the impacts of its psoriasis treatment Stelara losing exclusivity. J&J's current market valuation sits at $342 billion, even after a 12% drop over a one-year period. The transaction is funded through cash on hand and debt and expected to close later this year.

Joaquin Duato, Chairman and Chief Executive Officer at Johnson & Johnson, emphasized the strategic importance of the acquisition: "Building on our nearly 70-year legacy in neuroscience, this unique opportunity to add Intra-Cellular Therapies to our Innovative Medicine business demonstrates our commitment to transforming care and advancing research in some of today's most devastating neuropsychiatric and neurodegenerative disorders," according to a statement from Johnson & Johnson.

The crown jewel in Intra-Cellular's portfolio, CAPLYTA® (lumateperone), is at the heart of this acquisition, as detailed by Johnson & Johnson. The therapy, already approved for schizophrenia and bipolar depression treatment, has generated an estimated $675 million in sales last year. J&J believes it has the potential to reach around $5 billion in annual revenue. Beyond CAPLYTA®, Intra-Cellular's promising Phase 2 compound, ITI-1284, being studied for generalized anxiety disorder and Alzheimer’s disease-related psychosis, also strengthens J&J's neuroscience pipeline. Dr. Sharon Mates, Chairman, and CEO of Intra-Cellular Therapies emphasized, "Johnson & Johnson has a longstanding commitment to neuroscience, and we believe together, we can reach even more patients around the world."

This acquisition is indicative of an uptick in health care deals, the largest in biotech for over a year after a slump in 2024. It also follows J&J's trend of strategic growth endeavors post its consumer health division spinoff and the $13.1 billion acquisition of Shockwave Medical last year. With significant expectations riding on Intra-Cellular's CAPLYTA®, including a supplemental new drug application submitted to the FDA for major depressive disorder, the road ahead seems geared for a broadened impact on neuropsychiatric and neurodegenerative disease treatment. Advising on the deal were financial giants Citigroup Inc. and law firm Cravath, Swaine & Moore LLP for Johnson & Johnson, while Centerview Partners LLC, Jefferies Financial Group Inc., and Davis Polk & Wardwell LLP worked with Intra-Cellular.