JPM 2025: J&J snaps up neuroscience biotech Intra-Cellular for $14.6bnJPM 2025: J&J snaps up neuroscience biotech Intra-Cellular for $14.6bn

The proposed agreement will see J&J buy Intra-Cellular, a biopharmaceutical firm focused on the development and commercialization of therapeutics to treat central nervous system (CNS) disorders. Additionally, J&J will gain Intra-Cellular’s US Food and Drug Administration (FDA) approved once-daily oral therapy for schizophrenia and bipolar disorders, Caplyta (lumateperone).

The firm has also submitted a supplemental new drug application (sNDA) to the US FDA to increase Caplyta’s authorization to include major depressive disorder (MDD). Alongside Caplyta, the acquisition also includes ITI-1284, a Phase II compound, which is being evaluated in generalized anxiety disorder (GAD) and Alzheimer’s disease-related psychosis and agitation. Additionally, J&J will bag a clinical-stage pipeline that fit its areas of focus.

If completed, the transaction will be the biggest biopharma buyout since late 2023, when Bristol Myers Squibb laid out its plans to strengthen its neuroscience portfolio with the acquisition of Karuna Therapeutics for $14 billion.

Joaquin Duato, CEO of J&J, described neuroscience as one of the company’s“core areas” at the 43^rd annual JPM conference in San Francisco, California this week.

“Millions of patients have the disorders that Intra-Cellular and CAPLYTA address, bipolar disorder, schizophrenia, MDD, and it's an area of high growth that requires innovation to continue to address patient needs. […] It's a catalyst of growth in the short-term and in the long-term. So, it's clearly the type of criteria that we have stated consistently that guides our M&A efforts.”

Furthermore, Duato explained how the firm believes Caplyta “is going to be more than a $5 billion asset”. In turn, “this acquisition will help us” and J&J will have “sales above today’s analyst expectations, today and the rest of the decade.”

An outlier

At BIO 2024 in San Diego, California last June, Nauman Shah, global head of business development at J&J Innovative Medicine, highlighted the firm's approach to dealmaking. While larger deals may grab more headlines and appear more successful, Shah explained that success isn’t measured by the dollars spent or media coverage. Instead, he emphasized, “You can be open to deals regardless of their size, as long as they make strategic, financial, and ultimately scientific sense for us.”

Duato reiterated this point at the JPM conference on Monday. While he acknowledged that J&J has “the financial strength to be able to do deals like Intra-Cellular […] I also have to explain to everybody that these deals do not happen every day.”

“And as a matter of fact, for us, larger deals are more outliers. The majority of the value that we create is through smaller deals, tuck-ins where we can use our scale. In the last year, we did 75 smaller deals and that's where we create the majority of our value.”