J&J to acquire cancer drug developer Ambrx Biopharma for $2 billion

Key Points

Acquisition of Ambrx Biopharma by Johnson & Johnson:

• • Johnson & Johnson has announced a $2 billion cash deal to acquire Ambrx Biopharma, a pharmaceutical company specializing in cancer treatment.
  • Ambrx focuses on developing antibody-drug conjugates (ADCs), described as “guided missiles” in cancer treatment, aiming to target and eliminate cancer cells while minimizing damage to healthy tissue.

Strategic Move into ADCs and Industry Trend:

• • The acquisition positions Johnson & Johnson as the latest major pharmaceutical company to invest in antibody-drug conjugates (ADCs), following similar moves by other industry giants such as Pfizer, AbbVie, and Merck over the past year.
  • The announcement was made on the first day of the annual JPMorgan Healthcare Conference, emphasizing the strategic significance of the move in the evolving landscape of cancer therapeutics.

Revenue Strategy and Future Opportunities:

• • The acquisition aligns with Johnson & Johnson’s broader strategy to address a potential revenue gap in 2025, when its top-selling drug Stelara, used in treating the autoimmune disease psoriasis, is expected to face generic competition.
  • Dr. Yusri Elsayed, J&J’s global therapeutic area head of oncology, expressed optimism about the future opportunities presented by Ambrx’s pipeline and ADC platform, seeing them as a means to deliver enhanced precision biologics and transform cancer treatment.
  • Under the terms of the deal, Johnson & Johnson will pay $28 per share for Ambrx, approximately double the firm’s Friday closing price of $13.63. The deal is expected to be finalized in the first half of 2024. Following the announcement, Ambrx’s stock nearly doubled in early trading to just under the purchase price, while Johnson & Johnson’s stock remained flat.