Sector News

Consumer deal fever hits J&J with $2.1B deal to buy out Japan's Ci:z

October 24, 2018
Life sciences

Add another Big Pharma company to the wheeling and dealing in consumer health: Johnson & Johnson is shelling out to take full control of Japanese cosmetics and skincare specialist Ci:z.

J&J plans to pay 230 billion Japanese yen ($2.05 billion) in cash to acquire the share of Ci:z it doesn’t already own, gaining several lines of medical cosmetic products in the process, including Dr.Ci:Labo, Labo Labo and Genomer.

The deal will give J&J’s skincare franchise—which already sells such popular brands as Neutrogena—additional heft in Japan and other Asian markets.

Ci:z will bolster J&J’s offerings “by bringing in an agile innovation model and rapidly accelerating sales through our global commercialization expertise,” said J&J consumer chief Jorge Mesquita in a statement. The company depicts the transaction as a “springboard” to building its commercial capabilities “by leveraging one of the largest customer relationship management databases for direct-to-consumer skincare in Japan.”

Through its affiliate Cilag, the U.S. Big Pharma acquired 19.9% of the Japanese company in 2016—the same year it took over New Jersey-based dermocosmetics firm NeoStrata—and got exclusive ex-Japan rights to those Ci:z skin care products.

Now, to devour the entire company, J&J is offering 5,900 yen per share, which represents a 55% premium over Tuesday’s closing price. The monetary size of the deal matches up to what J&J will glean from selling its diabetes monitoring unit LifeScan to a private investment firm. J&J said it would launch the Ci:z tender offer Oct. 29 and hopes to complete the deal in the first half of 2019.

Beauty products have recently been a major driver of J&J’s consumer growth as its baby care franchise suffers from competition. For 2017, J&J’s beauty brands surpassed its over-the-counter drug segment to deliver $4.2 billion in worldwide sales, a jump of 7.8% from the previous year. Dr.Ci:Labo was at that time cited as a key sales contributor.

The trend has continued so far in 2018, as beauty products turned in $2.2 billion in sales in the first six months, once again “primarily driven” by the strength of Dr.Ci:Labo and by the group’s international expansion.

Western firms recognize the huge skincare business opportunity Asian countries embody, given South Korea’s and Japan’s well-recognized strength in the area and a potentially huge market in China.

Last September, Unilever announced that it would acquire South Korean skincare firm Carver Korea for €2.27 billion ($2.7 billion). Allergan just last month said it would build its very first Medical Aesthetics Innovation Center in China, hoping to spearhead a big push into the country.

The J&J-Ci:z deal also comes amid a torrent of consumer health change-of-hands initiated by Big Pharmas. Bristol-Myers Squibb was recently reported to be reviewing a sale of its French OTC business, eyed by potential buyers including German generics maker Stada. Trying to focus on innovative medicines, Novartis recently handed GlaxoSmithKline its stake in a consumer joint venture with the British pharma. And a bidding war is brewing for GSK’s Indian consumer business, which includes the popular nutritional drink Horlicks.

By Angus Liu

Source: Fierce Pharma

comments closed

Related News

June 24, 2022

Echosens and Novo Nordisk announce partnership to increase awareness and advance early diagnosis of NASH

Life sciences

Echosens, a high-technology company offering liver diagnostic solutions, and Novo Nordisk A/S, a leading global healthcare company, announced a partnership to advance early diagnosis of non-alcoholic steatohepatitis (NASH) and increase awareness of the disease among patients, healthcare providers and other stakeholders.

June 24, 2022

argenx receives positive CHMP opinion for Efgartigimod for the treatment of adult patients with Generalized Myasthenia Gravis in Europe

Life sciences

Positive opinion based on Phase 3 ADAPT trial showing efgartigimod provided clinically meaningful improvements in strength and quality of life measures. If approved, efgartigimod will be the first neonatal Fc receptor (FcRn) blocker for the treatment of adults in Europe living with rare neuromuscular disease generalized myasthenia gravis (gMG).

June 24, 2022

Galapagos finally takes M&A plunge, spending $251M for 2 biotechs in CAR-T push

Life sciences

Galapagos CEO Paul Stoffels, M.D., has finally taken the plunge on M&A. The newly minted chief executive has signed not one but two deals in an attempt to right the ship, bringing two small biotechs aboard for a combined 239 million euros ($251.4 million).