One of the big hur­dles fac­ing any­one who want­ed to buy Acte­lion was find­ing a way to come up with an ac­cept­able ac­qui­si­tion val­ue for its pipeline, which was high­ly prized by its in­de­pen­dent-mind­ed man­age­ment. So in the end, J&J got a buy­out deal done by be­ing cre­ative, spin­ning out a big part of the pipeline, with Acte­lion’s team in charge, while grab­bing rights to some prized late-stage as­sets for it­self.

In a deal an­nounced ear­ly this morn­ing, J&J agreed to pay $30 bil­lion for Acte­lion, ac­quir­ing an im­pres­sive port­fo­lio that in­cludes its block­buster new flag­ship ther­a­py for pul­monary ar­te­r­i­al hy­per­ten­sion. But they’re spin­ning its dis­cov­ery and ear­ly-stage ex­per­i­men­tal drugs in­to a new com­pa­ny — tem­porar­i­ly named R&D New­Co — while keep­ing a mi­nor­i­ty stake in the busi­ness.

Acte­lion CEO Jean-Paul Clozel will stay at the helm of the spin­out, while chair­man Jean-Pierre Gar­nier al­so re­tains his ti­tle in the new ven­ture.

J&J is pay­ing $280 a share in cash for the Swiss biotech and leav­ing R&D New­Co with a bil­lion dol­lars in liq­uid­i­ty as it lists on the Swiss ex­change. Acte­lion’s share­hold­ers are gain­ing shares in the new com­pa­ny as a div­i­dend. In ad­di­tion to a slate of mar­ket­ed drugs that in­cludes Op­sum­it, Up­travi and the orig­i­nal, pi­o­neer­ing PAH drug Tr­a­cleer, J&J al­so gains glob­al rights to pones­i­mod, an S1P1 re­cep­tor mod­u­la­tor in Phase III de­vel­op­ment for mul­ti­ple scle­ro­sis, along with cada­zol­id, a late-stage an­tibi­ot­ic in de­vel­op­ment for Clostrid­i­um dif­fi­cile-as­so­ci­at­ed di­ar­rhea.

J&J’s Alex Gorsky

J&J al­so gains an op­tion on the Phase II drug ACT-132577 for re­sis­tant hy­per­ten­sion. And the phar­ma gi­ant keeps a 16% stake in its spin­out, with a chance to dou­ble that amount through a con­vert­ible note.

The deal un­der­scores the high pre­mi­um that sought-af­ter drug as­sets can com­mand in this sell­er’s mar­ket. J&J is pay­ing 21 times es­ti­mat­ed 2020 earn­ings per share for the com­pa­ny, ac­cord­ing to Bloomberg’s Sam Fazeli, a very steep price for a deal like this. It al­so high­lights yet again how in­ef­fec­tive Sanofi has been in find­ing a ma­jor deal to help re­struc­ture the com­pa­ny as its di­a­betes fran­chise wanes. J&J es­sen­tial­ly el­bowed Sanofi aside, just as Pfiz­er did with Medi­va­tion.

J&J’s Alex Gorsky had this to say about the deal:

Adding Acte­lion’s port­fo­lio to our al­ready strong Janssen Phar­ma­ceu­ti­cals busi­ness is a unique op­por­tu­ni­ty for us to ex­pand our port­fo­lio with lead­ing, dif­fer­en­ti­at­ed in-mar­ket med­i­cines and promis­ing late-stage prod­ucts. We ex­pect to lever­age our es­tab­lished glob­al pres­ence and com­mer­cial strength to ac­cel­er­ate growth and pa­tient ac­cess to these im­por­tant ther­a­pies. Fur­ther, we be­lieve R&D New­Co will be strong­ly po­si­tioned to con­tin­ue Acte­lion’s lega­cy of in­no­va­tion and look for­ward to col­lab­o­rat­ing on the de­vel­op­ment of cut­ting-edge new ther­a­pies.

Digital therapeutics company Better Therapeutics announced on Thursday that it’s cutting 35% of its staff as it awaits FDA clearance for its first product.

The company, which launched eight years ago, is one of a growing group of companies seeking a digital alternative to traditional medicine. The space saw a record $7.5 billion in investments in 2021, according to Chris Dokomajilar at DealForma, with uses spanning ADHD, PTSD and other indications. However, private insurers have been slow to hop on board.

The FDA’s Oncology Center of Excellence has been a bright spot within the agency in terms of speeding new treatments to patients. That flexibility was on full display this morning as FDA released new draft guidance spelling out exactly how oncology drug developers can fulfill both the accelerated and full approval’s requirements with just a single randomized controlled trial.

While Congress recently passed legislation that will allow FDA to require confirmatory trials to be recruiting and ongoing prior to granting an accelerated approval, the agency is now making clear that the initial trial used to win the AA, if designed appropriately, can also serve as the trial for converting the accelerated approval into a full approval.