Johnson & Johnson (NYSE:JNJ) Completes Acquisition of Alios Biopharma – Deal to Include RSV Treatments.

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By Chris Hillman on September 30, 2014 Company

It has been announced that Alios BioPharma Inc., who develop proprietary therapeutics for a number of viral diseases, have come to a comprehensive agreement with fellow US medical company Johnson & Johnson (NYSE:JNJ) , who are a holding company. The agreement means that Alios BioPharma will be acquired by Johnson & Johnson (NYSE:JNJ) for an approximate figure of $1.75 billion in direct cash to be paid once the transaction is complete. The deal has been reviewed and verified by the CEO’s of both companies.

In the announcement, a spokesman for Alios Biopharma was quoted earlier as saying,

Alios BioPharma’s Chief Executive Officer, Lawrence M. Blatt expressed his joy in becoming a part of Johnson & Johnson (NYSE:JNJ)’s Janssen Pharmaceutical. He believes the company has a great history of introducing groundbreaking viral drugs into the market. Blatt believes that Alio’s efforts in targeting a variety of viral infections will blend well with Janssen’s efforts for finding innovative treatments for infections that are life threatening.

Alios are currently at an advanced stage in developing a treatment for infants suffering from respiratory syncytial virus (RSV), and it is important to note that this will be included in the deal. The treatment, known currently as AL-8716, is to be administered orally to the infants.

The deal opens up opportunities for Johnson & Johnson (NYSE:JNJ) to expand their explorations into treatment options for a number of viral infections as well as RSV via their Janssen Pharmaceutical unit. Comment on this was provided by the global head of R&D at the company, William N.Hait, who claimed that “RSV is the last of the major paediatric diseases with no available preventative therapy” while adding “AL-8176 complements our (Johnson & Johnson (NYSE:JNJ) existing early stage portfolio for RSV which aims to prevent and treat this disease.”

It is not believed that the purchase will be completed by the end of this quarter, though will almost certainly be settled by the end of the fourth quarter. It is believed that delays in the deal being concluded are due to scrutiny from executors of the Hart-Scott-Rodino Antitrust Improvements Act among other long standing customary closing conditions.

The acquisition is Johnson & Johnson (NYSE:JNJ)’s first of 2014 and the company moved into the third quarter holding $29.39 billion in cash and equivalents on its balance sheet. The company has 275 companies operating under its name across 60 countries including the US, and sells products in virtually all countries of the world. The company’s last significant acquisitions were the deal for Flexible Stenting Solutions Inc. in March 2013. They also concluded a divestiture deal for Ortho-Clinical Diagnostics business to Carlyle Group. It is believed that this later merger will be reflected positively by the markets that will see the potential in rolling out the RSV medicine.

Johnson & Johnson (NYSE:JNJ) opened today at a value of 106.50 and at 10:38 am EDT was trading at 106.80. The stock’s inst. Ownership is 67% whereas its range between 52 weeks has been between 85.50 and 108.77.