Johnson & Johnson ditches talks with Actelion; Sanofi said to be in frame

However, Actelion announced that it is currently engaged in discussions with another party regarding a possible strategic transaction, although it did not mention any names.

The group said there can be no certainty at this point that the talks with result in a deal and a further announcement will be made when it is deemed appropriate.

The Wall Street Journal cited people familiar with the matter as saying that France’s Sanofi was now in the frame.

The WSJ said it was not clear what price was being discussed or what structure might be involved, but that a deal could value the Swiss company at up to $30bn.

Morgan Stanley said it sees a rationale for Sanofi to potentially add a pulmonary aterial hypertension franchise.

“Sanofi is one of the leading companies in rare disease and has a drug in pulmonary fibrosis in phase 2 and to a lesser extent dupilumab in phase 3 in severe asthma. There is therefore a logic to adding a PAH franchise,” it said.

However, the bank also highlighted the fact that chief executive officer Olivier Brandicourt said the company will remain financially disciplined, as illustrated by the decision to halt the takeover process for Medivation last summer.

Brandicourt also said the company wants to avoid the creation of a new patent cliff, which would be a medium-term issue with the Opsumit drug.

MS said: “Our scenario analysis of a potential deal between Sanofi and Actelion suggests that, at a price of $250, Sanofi could see double-digit EPS accretion and – assuming high synergies and Actelion's low tax rate – some value creation.”

At 1550 GMT, Actelion shares were down 9.3% to CHF189.10 and Sanofi was down 2.5% to €75.54.