By Paul Arnold and Ludwig Burger
ZURICH/FRANKFURT (Reuters) - Shares in Actelion Ltd (S:ATLN) jumped as much as 19 percent to record highs on Friday on reports that U.S. healthcare company Johnson & Johnson (N:JNJ) was interested in a takeover of the fast-growing Swiss biotechnology firm.
A person familiar with the situation told Reuters that Johnson & Johnson (J&J) (N:JNJ) had met Actelion about a deal, and that there was broader interest from prospective suitors in the industry, after Bloomberg on Thursday reported J&J's interest.Deliberations were still at an early stage and Actelion was working with an adviser to explore options, Bloomberg said in its report.
Actelion declined to comment. J&J did not immediately respond to a request for comment.
The Swiss lung disease specialist has been seen as a takeover target. Any confirmation of talks by J&J or Actelion would probably prompt competing bids, "most likely from" larger Swiss peer Novartis (S:NOVN), one investment banker told Reuters. Another source close to Novartis, however, said the drugmaker was not very impressed by Actelion's drug development pipeline.
Actelion shares surged by 18.8 percent at one point to a peak of 187.70 Swiss francs, valuing the company at around $20 billion. They were up 13.9 percent by 1249 GMT, virtually matching the share's total gains this year up to Thursday's close.
Eric Le Berrigaud, an analyst at brokerage Bryan Garnier, also expected big Swiss drugmakers to express interest in Actelion if either Actelion or J&J confirm their talks.
"We should then see many other (companies) interested (in Actelion). That will probably include at least one of the two other Basel-based companies," Le Berrigaud said, referring to Novartis and Roche (S:ROG).
Analysts at Bank of America (NYSE:BAC) Merrill Lynch and Bryan Garnier said a bid could be worth up to 220 francs or 250 francs per share, respectively, stoked by appetite in the industry for fast growing businesses.
Actelion's Opsumit and Uptravi drugs to treat the life-threatening condition of high pressure in blood vessels to the lungs will generate more than $4.6 billion in combined 2020 sales, analysts forecast, up from an estimated 1.4 billion this year.
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Actelion's recently launched drugs would be attractive to big pharmaceutical companies with deep pockets, but its co-founder and Chief Executive Jean-Paul Clozel, who holds a 3.5 percent stake, could put up a fight as he has repeatedly said he wants the company to remain independent.
In 2011, he managed to rally shareholders against activist investor Elliott's campaign to put the biotech firm on the auction block. The shares have more than tripled since then.
"We continue to believe that management, as quoted on many conference calls and public presentations, remains committed to Actelion as an independent company," Barclays (LON:BARC) analysts said.
J&J agreed to buy Abbott Laboratories' (N:ABT) eye care business for about $4.33 billion in cash in September and Chief Executive Alex Gorsky said earlier this year that the company was interested in deals to expand its main consumer, medical device and pharmaceuticals segments.
J&J had derived about half its revenue from acquired products, he said.
In October, Actelion raised its earnings guidance for the third time this year as sales from Opsumit and Uptravi for the first time surpassed those of Tracleer, its decade-long mainstay that lost U.S. patent protection last November.
($1 = 1.0135 Swiss francs)