Achillion Pharmaceuticals (ACHN) announced after the close on Tuesday a worldwide license and collaboration arrangement with Janssen Pharmaceuticals, of Johnson & Johnson (JNJ), to develop and commercialize Achillion’s lead hepatitis C (HCV) assets.
It’s not the buyout that many ACHN investors had been hoping for, but J&J are investing $225 million in Achillion, 18.4 million shares at a price of $12.25 per share. ACHN closed trading on Tuesday at $10.66.
The deal includes access to ACH-3102, ACH-3422, and/or sovaprevir. The goal is to develop a short-duration oral regimen for the treatment of HCV, and the initial regimen to be explored will feature ACH-3102 in combination with an NS3/4A HCV protease inhibitor, plus an NS5B HCV polymerase inhibitor from the collaboration.
The “$1.1 billion in potential development, regulatory and sales milestone payments” includes ACHN’s separate equity investment, thus total milestones should be around $875 million. Achillion is also eligible to royalties in the mid-teens or low-twenties on future worldwide sales.
Achillion ended the first quarter with $276 million in cash and marketable securities. The investment brings the company’s cash position to about $500 million.
