J&J Joins Pharma M&A Bandwagon, to Buy Cancer Biotech for $3.05B

Johnson & Johnson JNJ announced a definitive agreement to acquire Halda Therapeutics, a clinical-stage biotech developing targeted oral cancer medicines, for $3.05 billion in cash.

The acquisition will bring Halda’s proprietary RIPTAC platform, a technology being used to develop oral, targeted therapies for multiple types of solid tumors. Halda Therapeutics’ lead pipeline candidate is HLD-0915, a once-daily oral therapy, being developed in a phase I/II study to treat metastatic castration-resistant prostate cancer (mCRPC). Data from this ongoing study, presented recently, showed encouraging signs of anti-tumor activity. HLD-0915 has been designed to induce selective tumor cell death and overcome common mechanisms of treatment resistance in prostate cancer. Halda is also developing additional RIPTAC programs for breast, lung and other solid tumors.

The deal will strengthen J&J’s broader oncology pipeline, mainly in prostate cancer, where it already has a strong presence with drugs like Zytiga, Erleada and Akeega. The acquisition is expected to close in the coming months, pending antitrust review and customary conditions. J&J anticipates approximately 15 cents in dilution to adjusted EPS in 2026.

J&J has been on an acquisition spree lately. In the last 18 months, J&J executed around 60 small and big M&A deals. A key acquisition this year was that of Intra-Cellular Therapies in April, which added antidepressant drug, Caplyta, to its neuroscience portfolio. Caplyta is already approved for the treatment of schizophrenia and is the only medicine approved for the treatment of depression in both bipolar 1 and 2. With a regulatory application under review, Caplyta is expected to be approved as an adjunctive treatment for major depressive disorder later this year.

Biotech on a M&A Spree

Pharmaceutical M&A’s have been on a roll in the past couple of months.  Last week, Merck MRK announced a definitive agreement to acquire Cidara Therapeutics CDTX for approximately $9.2 billion. The acquisition will add CDTX’s lead pipeline candidate, CD388, to Merck’s pipeline. CD388 is a first-in-class long-acting, strain-agnostic antiviral agent, currently being evaluated in late-stage studies for the prevention of seasonal influenza in individuals at higher risk of complications.

Last week, Pfizer PFE closed the acquisition of obesity drug developer, Metsera, for around $10 million, after a heated bidding war against Danish rival, Novo Nordisk. The Metsera acquisition has brought Pfizer back into the lucrative obesity space by adding the latter’s four novel clinical-stage incretin and amylin programs, which are expected to generate billions of dollars in peak sales.

In October, Lilly announced a definitive agreement to acquire Adverum Biotechnologies, which will add the latter’s lead candidate, Ixo-vec, an intravitreal single-administration gene therapy being developed in phase III to treat vision loss associated with wet age-related macular degeneration. Ixo-vec has the potential to transform chronic eye care into a one-time treatment.

Other key acquisition announcements were Novartis’ offer to buy Avidity Biosciences, an innovator in RNA therapeutics, for $12 billion in cash and Novo Nordisk’s proposed acquisition of Akero Therapeutics, for up to $5.2 billion in cash. Akero’s lead candidate is efruxifermin (EFX), which is currently being evaluated in three ongoing phase III clinical studies for the treatment of metabolic dysfunction-associated steatohepatitis. 

JNJ’s Price Performance, Valuation and Estimates

J&J’s shares have outperformed the industry year to date. The stock has risen 38% in the year-to-date period compared withthe 13.9% increase of the industry.

From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 17.49 forward earnings, higher than 16.71 for the industry. The stock is also trading above its five-year mean of 15.65.

The Zacks Consensus Estimate for 2025 earnings has risen from $10.86 per share to $10.87, while that for 2026 has increased from $11.46 to $11.48 over the past 30 days.

J&J has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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