J&J (JNJ) to Boost Dermatology Portfolio With New Acquisition

Johnson & Johnson JNJ announced that it has entered into a definitive agreement to acquire private biotech Proteologix for $850 million in cash, with the potential for an additional milestone payment.

The transaction is expected to be closed in mid-2024, subject to customary closing conditions.

With the latest acquisition, JNJ is looking to boost its dermatology portfolio with an aim to address significant unmet needs in atopic dermatitis (AD), also known as eczema.

Proteologix is engaged in developing bispecific antibodies for immune-mediated diseases. The company’s pipeline includes a phase I ready candidate, PX128, a bispecific antibody targeting IL-13 plus TSLP mediator, developed for treating severe AD and moderate-to-severe asthma.

Proteologix is also developing PX130, a bispecific antibody targeting IL-13 plus IL-22, in preclinical studies for addressing moderate-to-severe AD.

Shares of JNJ have decreased 1.5% year to date against the industry’s increase of 16.2%.

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The acquisition looks like a good strategic fit for J&J as the addition of Proteologix’s pipeline candidates is likely to build a portfolio of differentiated and complementary bispecifics while addressing immune-mediated diseases.

The bispecific antibodies are designed to provide best-in-disease therapeutics for treating people with moderate-to-severe AD and asthma.

We note that Johnson & Johnson has struck several deals over the years and has spent billions of dollars in M&A activity and licensing deals.

The company has enough funds to pursue additional bolt-on acquisitions and deals to boost its portfolio. JNJ’s key areas of focus include immunology, infectious diseases & vaccines, neuroscience, cardiovascular & metabolism and oncology, among others.

Zacks Rank & Stocks to Consider

J&J currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the healthcare sector are Ligand Pharmaceuticals Incorporated LGND, Entera Bio Ltd. ENTX and ANI Pharmaceuticals, Inc. ANIP, each carrying a Zacks Rank #2 (Buy) at present.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 60 days, estimates for Ligand’s 2024 earnings per share have improved from $4.42 to $4.56. Year to date, shares of LGND have gained 19.1%.

Earnings of LGND beat estimates in each of the trailing four quarters, the average surprise being 56.02%.

In the past 60 days, estimates for Entera Bio’s 2024 loss per share have narrowed from 75 cents to 25 cents. Year to date, shares of ENTX have surged 333.4%.

ENTX’s earnings beat estimates in three of the trailing four quarters and missed the same once, the average surprise being 6.50%.

In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 earnings per share have improved from $4.43 to $4.44. Year to date, shares of ANIP have jumped 15.7%.

Earnings of ANIP beat estimates in each of the trailing four quarters, the average surprise being 53.90%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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