J&J buying Crucell for $2.41B

TRENTON - Johnson & Johnson said today that it is buying Holland's Crucell NV for about $2.41 billion, marking the American health-care giant's latest effort to gain a big foothold in the coveted vaccine business.

The agreement had been expected since September, when the companies said they were in advanced talks. Johnson & Johnson had bought a 17.9 percent stake in the Dutch biotechnology company in the third quarter of 2009, saying it would help J&J boost its focus on preventive medicine and infectious diseases.

The current offer for the remaining shares is worth 1.75 billion euros, or 24.75 euros per share, or $34.40, in cash. That marks a 58 percent premium to Crucell's closing price on Sept. 16, the day before the companies announced a potential deal.

J&J, which is based in New Brunswick, N.J., and has operations in the Philadelphia region, will have a subsidiary initiate a recommended public offer under Dutch law for all the outstanding shares. The companies said the deal is expected to close in the first quarter of 2011.

Crucell, a major vaccine supplier to UNICEF and developing countries, also develops medicines that use antibodies to zero in on organisms causing infectious diseases. It currently sells vaccines targeting respiratory infections, diseases that strike children and travelers, and diseases common in developing countries, such as malaria, cholera and typhoid.

Last year, Johnson & Johnson invested nearly $1.4 billion in Irish biotech company Elan Corp., in part to jointly develop a vaccine to prevent Alzheimer's disease, a goal that has become something of a holy grail among researchers. That project is continuing.

Shortly after that deal and the initial Crucell investment, Paul Stoffels, global head of pharmaceutical research and development at Johnson & Johnson, told the Associated Press his company intended to become a major player in the vaccine business.

"This potential combination would provide us with a new platform for growth and advances our goal to deliver integrated health care solutions, with particular emphasis on prevention," Stoffels said in a statement today.

Vaccines have become a desirable area for pharmaceutical companies looking to diversify and replace revenues lost as blockbuster drugs get cheaper generic rivals. That's because vaccines increasingly command high prices and rarely face generic competition, so they bring in steady revenue for decades.

J&J has about $64 billion in annual sales and makes a broad range of products from No More Tears baby shampoo to biologic drugs.

It said it will retain Crucell's existing facilities and senior management, along with current staffing levels. It will use Crucell as the center of its vaccines business and maintain its headquarters in Leiden, the Netherlands.

Crucell's board supports the deal, which must be approved by regulators.

The companies have been working together since 2009 to develop a universal flu vaccine and vaccines directed against infectious and noninfectious diseases.

Johnson & Johnson expects the buyout to cut 3 cents to 5 cents per share from earnings in 2011.

In midday trading Wednesday in New York, Crucell's U.S. shares rose 28 cents at $34.11, while J&J shares rose 13 cents to $62.93.