J&J reportedly in talks to buy Protagonist

Protagonist Therapeutics (NASDAQ:PTGX [https://seekingalpha.com/symbol/PTGX]), a biotech focused on peptide-based therapeutics, traded ~30% higher on Friday after The Wall Street Journal reported that Johnson & Johnson (NYSE:JNJ [https://seekingalpha.com/symbol/JNJ]) is in talks to acquire the company.

Citing people familiar with the matter, the publication noted that the deal, details of which were not yet finalized, is expected to consolidate JNJ’s (NYSE:JNJ [https://seekingalpha.com/symbol/JNJ]) existing partnership with the Newark, California-based company.

A final agreement is not guaranteed, the people said, adding that the terms of the deal being discussed couldn’t be obtained.

A potential transaction is expected to well surpass Protagonist’s (NASDAQ:PTGX [https://seekingalpha.com/symbol/PTGX]) market capitalization of roughly $4B, including a deal premium, and boost JNJ’s portfolio of immune and cancer drugs with two experimental drugs.

The companies are currently in pact to develop an oral therapy for [https://www.wsj.com/health/pharma/johnson-johnson-in-talks-to-buy-protagonist-therapeutics-38e0b69d] immune diseases, including plaque psoriasis and ulcerative colitis, with JNJ having an exclusive license to commercialize the product.

With the deal, the New Jersey-based pharma giant, which already owns 4% of its partner, is expected to add another experimental therapy called rusfertide, developed by Protagonist (NASDAQ:PTGX [https://seekingalpha.com/symbol/PTGX]) and Takeda (TAK [https://seekingalpha.com/symbol/TAK]).

Rusfertide has shown potential in a rare blood cancer called polycythemia vera in late-stage development.

MORE ON JOHNSON & JOHNSON, PROTAGONIST

* Johnson & Johnson: A Safe Haven That's Quietly Becoming A Bit Overpriced [https://seekingalpha.com/article/4829076-johnson-and-johnson-safe-haven-quietly-becoming-overpriced]
* Johnson & Johnson (JNJ) Presents at Bernstein 2nd Annual Global Healthcare Conference Transcript [https://seekingalpha.com/article/4825596-johnson-and-johnson-jnj-presents-at-bernstein-2nd-annual-global-healthcare-conference]
* Protagonist Therapeutics, Inc. (PTGX) Presents At H.C. Wainwright 27th Annual Global Investment Conference Transcript [https://seekingalpha.com/article/4821899-protagonist-therapeutics-inc-ptgx-presents-at-h-c-wainwright-27th-annual-global-investment]
* Legend Biotech, J&J ink Carvykti supply agreement [https://seekingalpha.com/news/4502499-legend-biotech-johnson-and-johnson-ink-carvykti-supply-agreement]
* J&J hit with $966M jury award in Los Angeles over talc-related cancer case [https://seekingalpha.com/news/4502425-jj-hit-with-966m-jury-award-over-talc-related-cancer-case]