J&J to Pay $2B for Cancer Drug Developer Ambrx Biopharma

Healthcare giant Johnson & Johnson (JNJ) has acquired Ambrx Biopharma, a company specializing in targeted chemotherapy treatments, in a $2 billion all-cash deal.

JNJ will pay $28 per share, roughly double Ambrx’s closing price on Friday, for Ambrx and a subsidiary of the company.

Ambrx focuses on antibody drug conjugates (ADCs), which attack cancer cells from the outside while leaving healthy tissues alone. In recent clinical studies, the company has employed its techniques to target breast cancer and prostate cancer and has received fast-track designation from the US Food and Drug Administration for its ARX517 prostate therapy.

The deal marks JNJ’s first biotech purchase in recent years, as most of its recent actions have been in medtech, including its $16.6 billion Abiomed deal in 2022 and $400 million Larimar deal last November. It announced in December that it will purchase a retinal disease gene therapy from MeiraGTx for $65 million.

ADCs have recently made a growing number of deal-making headlines. AbbVie paid $10.1 billion in cash for ADC developer ImmunoGen in November. Other transactions include Pfizer’s $43 billion acquisition of Seagen and Merck’s Daiichi Sankyo acquisition for $5.5 billion to collaborate on the development of three ADCs.

Ambrx was spun out of The Scripps Research Institute in 2003. The transaction is expected to close in the first half of 2024.