Johnson & Johnson acquires Yellow Jersey for $1.25 billion By Investing.com

NEW BRUNSWICK, N.J. – Johnson & Johnson (NYSE: JNJ) has completed the acquisition of Yellow (OTC:) Jersey, a biopharmaceutical company, securing the global rights to NM26, a bispecific antibody for atopic dermatitis, in a deal worth approximately $1.25 billion. The announcement comes following the initial declaration of the agreement on May 28, 2024.

NM26, now ready to commence Phase 2 trials, is designed to target two pathways associated with atopic dermatitis (AD), a common inflammatory skin disease. By simultaneously addressing the IL-4R alpha subunit and IL-31, NM26 aims to reduce both skin inflammation and itch, which are hallmarks of AD.

David Lee, Global Immunology Therapeutic Area Head at Johnson & Johnson, expressed optimism about NM26’s potential to revolutionize AD treatment and its applicability to other inflammatory skin diseases.

Candice Long, Worldwide Vice President of Immunology at Johnson & Johnson, highlighted the urgency to improve patient outcomes, as nearly three-quarters of AD patients do not achieve remission with current treatments.

AD affects over 26 million Americans, leading to significant quality of life challenges, including increased risks of infection, sleep disturbance, and mental health issues.

Financially, the transaction will result in an in-process research and development charge of around $1.25 billion for the third quarter of 2024, with an expected adjusted earnings per share (EPS) dilution of $0.56 for 2024 and $0.10 for 2025. These figures will be reflected in the upcoming second-quarter earnings call on July 17, 2024.

Johnson & Johnson, a leader in healthcare innovation, aims to deliver advanced healthcare solutions across Innovative Medicine and MedTech.

The information provided is based on a press release statement from Johnson & Johnson.

In other recent news, Johnson & Johnson (JNJ) has seen several significant developments. The company disclosed positive results from the Phase 3 CARTITUDE-4 study, demonstrating a survival benefit in patients with multiple myeloma treated with CARVYKTI®. JNJ has also submitted a Biologics License Application to the FDA for a new cancer treatment, amivantamab, following promising results from the Phase 3 PALOMA-3 study.

In the realm of mergers and acquisitions, JNJ has been involved in substantial deals, including a $13 billion purchase of Shockwave Medical (NASDAQ:). However, the company is also facing legal challenges. The U.S. Supreme Court has directed a lower court to reassess a lawsuit involving JNJ and other pharmaceutical companies over allegations of facilitating terrorism.

Additionally, a proposed class action is demanding medical monitoring for women who may develop cancer due to the use of JNJ’s talc-based products.

Analysts from RBC Capital have maintained an Outperform rating on JNJ, while Citi has adjusted its price target for the company to $180, maintaining a ‘Buy’ rating.

These are some of the recent developments concerning Johnson & Johnson.

InvestingPro Insights

Amidst its strategic acquisition of Yellow Jersey, Johnson & Johnson (NYSE: JNJ) remains a stalwart in the healthcare sector, as reflected in its robust financial metrics and investor-friendly practices. With a solid market capitalization of $359.63 billion, the company’s financial stability is evident. Investors may find reassurance in Johnson & Johnson’s consistent history of dividend growth, having raised its dividend for 53 consecutive years, which aligns with its current dividend yield of 3.32%. This commitment to shareholder returns is complemented by the company’s low price volatility, making it an attractive option for those seeking stable investments in the healthcare industry.

The company’s P/E ratio stands at 9.6, offering a potentially appealing entry point for value investors, especially when considering the company’s significant gross profit margin of 69.34% over the last twelve months as of Q1 2024. Additionally, Johnson & Johnson’s ability to generate strong cash flows, which can sufficiently cover interest payments, speaks to its financial health and operational efficiency.

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