Johnson & Johnson
) has received a binding offer for its Ortho-Clinical Diagnostics
(OCD) business from
The Carlyle Group
). The Carlyle Group is looking to acquire the OCD business for
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If Johnson and Johnson accepts the offer by Mar 31, the deal
should close toward mid-year.
Johnson and Johnson had been looking at different strategic
options (including divestment) for its OCD business for quite
some time. The divestment, if it goes through, would allow the
company to maximize shareholder value and focus more on core and
higher growth areas (including companion diagnostics, which
supports pharmaceutical pipeline development). We are positive on
the potential disposal of the OCD segment.
We note that Johnson and Johnson is not the only company focusing
on its core assets and divesting (or planning to divest) its
non-core assets to drive growth. Several other big pharma
companies have either divested or entered into agreements to
divest their non core assets. For example,
) divested several non-core brands from its Consumer Healthcare
In the near term, we believe that investor focus will remain on
the release of fourth quarter and full year 2013 results (Jan
21). At that time, Johnson and Johnson's plans regarding the
acceptance of the offer should be clear.
Meanwhile, the company suffered a setback with Xarelto receiving
a negative vote from the U.S. Food and Drug Administration's
Cardiovascular and Renal Drugs Advisory Committee. Johnson and
Johnson is looking to get Xarelto approved in combination with
standard antiplatelet therapy to reduce the risk of thrombotic
cardiovascular events in patients with acute coronary syndrome.
Johnson and Johnson carries a Zacks Rank #3 (Hold). Some
better-ranked stocks include
). The stock carries a Zacks Rank #2 (Buy).