Johnson & Johnson has announced that it is to acquire biopharmaceutical company, Scios Inc. in a $2.4 billion cash for stock exchange.
Under the terms of the agreement, Scios shareholders will receive $45.00 for each outstanding Scios share. The value of the transaction is expected to be approximately $2.4 billion.
The boards of directors of Johnson & Johnson and Scios have given their approval to the transaction, which is subject to clearance under the Hart-Scott-Rodino Anti-Trust Improvements Act. This transaction is also subject to the approval of the shareholders of Scios and other customary closing conditions.
Scios is a biopharmaceutical company developing treatments for cardiovascular and inflammatory disease. Scios’ product Natrecor is the first novel agent approved for congestive heart failure (CHF) in more than a decade.
Natrecor is a recombinant form of a naturally occurring protein secreted by the heart as part of the body’s response to CHF. The drug has several significant advantages over existing therapies for CHF, the single most common cause of hospitalisation in the United States for patients over 65.
The transaction is expected to close in the second quarter of 2003. This transaction is expected to have a $0.05 dilutive impact in 2003 and 2004. In addition, an estimated one-time charge of approximately $700 million for in-process research and development will have an EPS impact (earnings per share) of $0.23.