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Johnson & Johnson (NYSE:JNJ) Rallies On $6.5 Billion Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) Acquisition Deal

Johnson & Johnson (NYSE:JNJ) stock edged higher after the company confirmed it had reached an agreement to acquire drug-maker Momenta Pharmaceuticals, Inc. (NASDAQ: MNTA). The $6.5 billion acquisition is poised to expand the company’s pipeline of drugs, especially in the treatment of autoimmune diseases.

JnJ Stock Analysis

Investors reacted to the acquisition pushing the stock, higher, closer to its 52-week high of 157. JnJ bounce back is almost complete after plunging to record lows of $112 at the peak of the COVID-19 pandemic in March.

The deal price of $52.50 represents a 70% premium, affirming how JnJ is serious about strengthening its autoimmune drugs pipeline. Momenta’s acquisition is poised to strengthen the company’s market sentiments when its blockbuster drugs have come under pressure from generics. The acquisition is poised to broaden the company’s Jansen Pharmaceutical unit.

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Momenta Autoimmune Edge

Momenta joins JnJ having made a name for itself on the development of treatments for rare autoantibody driven diseases. The company boasts of a pipeline of drugs to treat Myasthenia Gravis and Hemolytic disease of the Fetus.

The company is currently working on experimental drug nipocalimab, under trials to treat rare autoimmune diseases such as hemolytic anemia. The candidate drug is one of the newer classes of autoimmune drugs that other companies such as Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) are also working on. The new class for autoimmune medicines could generate revenues in the upwards of $20 billion by 2025.

Momenta Stock Rally

Momenta shares rallied 69%, to highs of $52.15 and just a hair away from the $52.50 offer price, on the announcement of the JNJ acquisition push. Momenta has been on an impressive run prior to the announcement of the deal. The stock is now up by more than 100% for the year.

The JNJ $6.5 billion deal is poised to close before the end of the year. The deal is also expected to have 10 to 15 cents per share impact on JnJ earnings in 2021.

Ruchi Gupta

Ruchi Gupta covers various beats from finance to technology and from lifestyle to hobbies. She has an MBA in Finance. Ruchi enjoys writing on celebrities and political news. She likes traveling and exploring places.

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