In American Psycho, Christian Bale’s character Patrick Bateman famously struggles to get a table at New York restaurant Dorsia. Hopefully brokers will be more accommodating to investors looking to get their hands on stock in Idorsia, which is to be spun out of Actelion (ALIOY) in the second quarter of 2017.
Johnson & Johnson (JNJ) announced a deal in January to buy Actelion, the Swiss biotech group, for $30 billion: its largest ever acquisition and an expensive purchase (10x revenues) even by the pharmaceutical sector’s standards.
J&J had been looking to bolster its drugmaking unit for several years in an effort to replace revenues from its flagship arthritis medicine Remicade expected to be lost to cheaper “biosimilar” drugs being launched by competitors.
However, the founder and CEO of Actelion, Jean-Paul Clozel, didn’t just roll over and take the money. He demanded to keep control of the company’s research labs and early-stage experimental medicines before consenting to the sale. This business will be known as Idorsia and run by Clozel. “I’m going to stay in my little corner within the laboratories“, he told reporters.
Shares of Idorsia will be distributed to Actelion’s shareholders as a dividend in kind and listed on the SIX Swiss Exchange on the day that J&J’s tender offer for Actelion settles. J&J will initially hold 16% of the shares of Idorsia and have rights to potentially increase to 32% through a convertible note.
With the Actelion tender offer set to close on 21st April, and 77% of shares already tendered, Idorsia is likely to begin trading before the end of the quarter. Move fast if you want to get a seat at the table.
Disclosure: The author holds no shares of any stock mentioned
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