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J&J and Crucell…But wait, there’s more!

If the recent action with sanofi-aventis and Genzyme has taught us anything (in the several articles on this blog and our website), the announcement of a potential merger or acquisition often means the beginning of protests and confusion. Get ready for another one of those rides, perhaps. Within hours of the announcement by Johnson & Johnson and Crucell that that latter is on the part toward becoming a vaccine division of the former, at least one Crucell investor is waving a red flag.

Today, on the heels of the announcement that Crucell and J&J were in the advanced process of negotiations for the shares of Crucell that J&J doesn’t already own for $2.3 billion (click here to read the story on our website), Crucell’s second-largest shareholder, private investment company Van Herk Groep, is chiming in with some serious reservations.

As Gertjan van der Baan, a director of Van Herk says, the offer to buy the rest of the Dutch company is too low and has come too early, and he calls the EUR24.75-per-share proposal (roughly $32.30 per share) “meager.” However, he declined to say whether Van Herk will tender its shares, saying that he will wait for the formal offer.

Van Herk Groep has a 9.6 percent stake in Crucell to J&J’s 17.9 percent, making its voice a pretty loud one. Van der Baan told Dow Jones Newswires that he thinks Crucell is in a transition phase and has the revenue potential of a biotech company along with the low risk profile one tends to see in other pharma companies.

On a more positive note, Jack Jonk, head of equities at Delta Lloyd Asset Management—which owns between 4 percent and 5 percent of Crucell’s stock—says the proposal seems to be a move “in the right direction” and one that makes sense strategically.

“But it’s to early now to assess [the bid] so we’re going to take our time to study it,” he said.

One thing that analysts seemed united on is the low potential for any bidding war over Crucell, in part because J&J already owns such a significant chunk of the company.

About a year ago, J&J paid $443.5 million for the nearly 18 percent stake in the Dutch biotech, and the two companies also forged a pact at that time, initially concentrating on advancing a universal flu-mAb antibody that can treat and prevent all influenza A strains, including swine and bird flu. Long-term strategies at the time were to develop a universal influenza vaccine as well as monoclonal antibodies and vaccines directed against up to three other infectious and non-infectious disease targets.

“Despite significant advances in prevention and treatment, influenza remains a major health threat, and each year, vaccines must be formulated to address the current influenza strain,” Paul Stoffels, the global head of pharmaceuticals R&D at Johnson & Johnson said at the time. “A universal antibody or vaccine that protects against a broad range of strains would be an important advance in helping doctors and nurses manage the annual influenza season and control acute epidemic and pandemic outbreaks.”

September 17, 2010 Posted by | Corporate, M&A activity | , , , , | Leave a comment