March 10, 2017 | Health Care | Europe | Ended

Actelion / Johnson & Johnson: Uptravi Assessment and the R&D NewCo Spin-off

The Actelion / J&J deal has multiple moving parts that should together determine whether the transaction will successfully complete, on time, and will offer a meaningful return to shareholders. This research report assesses and answers two investment questions: 1) can the Pharmacovigilance Risk Assessment Committee (PRAC) swiftly conclude that Actelion’s Uptravi drug be withdrawn in Europe, and could this persuade the US Food and Drug Administration (FDA) to follow suit, thus provoking J&J to invoke the Material Adverse Effect (MAE) clause, all within two months?; and, 2) is there substantial value in the R&D NewCo “sweetener”, and will the market realise this value ahead of the deal closing?

Contents 1. Uptravi Overview and its Known Mortality Rates 2. The Issue in France and Key Reviewers (ANSM, EMA, PRAC) 3. EMA’s Safety Monitoring Assessment Process, Timing and Outcome 4. Important Material Adverse Effect Considerations 5. R&D NewCo Spin-off and Precedent Contingent Value Rights 6. Relevant Precedent M&A Transactions 7. Implied Probability of Completion and Risk Arbitrage Thoughts (35 pages)

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