Johnson & Johnson to acquire Abiomed for $16.6B (updated)

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Johnson & Johnson announced Nov. 1 that it entered into a definitive agreement to acquire medical technology company Abiomed for approximately $16.6 billion. 

According to the announcement from the New Brunswick-headquartered health care giant, the deal is for an upfront payment of $380 per share in cash and Abiomed shareholders will also receive a non-tradeable contingent value right entitling each to receive up to $35 per share, if certain milestones are achieved. 

Massachusetts-based Abiomed focuses on technology for heart, lung and kidney support. The move, therefore, expands J&J MedTech’s reach into the area of cardiovascular disease, which is the leading cause of death in the U.S., according to the Centers for Disease Control and Prevention. 

In November 2021, J&J announced its plans to split into two publicly traded companies: one focusing on consumer health products and the other on pharmaceutical and medical device operations. In February, the company announced the medical devices division would rebrand as Johnson & Johnson MedTech. The split is on track to be completed in 2023.

“The addition of Abiomed is an important step in the execution of our strategic priorities and our vision for the new Johnson & Johnson focused on Pharmaceutical and MedTech,” J&J CEO Joaquin Duato said in a statement. “We have committed to enhancing our position in MedTech by entering high-growth segments. The addition of Abiomed provides a strategic platform to advance breakthrough treatments in cardiovascular disease and helps more patients around the world while driving value for our shareholders.” 

Abiomed Chairman, President and CEO Michael Minogue said the acquisition “reflects the remarkable value Abiomed created with our revolutionary Impella heart pump platform and promising pipeline” and “will enable us to leverage Johnson & Johnson’s global scale, commercial strength and clinical expertise to accelerate our mission of making heart recovery the global standard of care.” 

The Impella heart pump is U.S. Food and Drug Administration approved for patients with severe coronary artery disease requiring high-risk PCI (percutaneous coronary intervention), treatment of AMI (acute myocardial infarction) cardiogenic shock or right heart failure. 

If approved, J&J expects the deal to close before the end of the first quarter of 2023. The company also expects the deal to be slightly dilutive to neutral to adjusted earnings per share in the first year and then accretive by approximately $0.05 in 2024, and increasingly accretive thereafter. 

As part of the deal, Abiomed will operate as a standalone business within the MedTech division. J&J said Minogue has established a succession plan and will assist in the transition. Andrew Greenfield, who has been with Abiomed for 17 years, most recently as chief commercial officer, has been appointed president.  

Under the leadership of J&J MedTech Executive Vice President and Worldwide Chairman Ashley McEvoy, Michael Bodner, an interventional cardiovascular executive at J&J, will lead the integration.

“Abiomed’s skilled workforce and strong relationships with clinicians, along with its innovative cardiovascular portfolio and robust pipeline, complement our MedTech portfolio, global footprint and robust clinical expertise. Together, we have the incredible opportunity to bring lifesaving innovations to more patients around the world,” McEvoy said. “We are committed to investing for growth and look forward to welcoming the talented team and working together to foster our shared patient-first mindset and winning culture of innovation.”

J.P. Morgan Securities LLC is serving as financial advisor to Johnson & Johnson, and Cravath, Swaine & Moore LLP is serving as legal advisor. Goldman Sachs & Co. LLC is serving as financial advisor to Abiomed, and Sullivan & Cromwell LLP is serving as legal advisor. 

Editor’s note: This story was updated at 9:52 a.m. ET Nov. 1 to include a statement from Ashley McEvoy of Johnson & Johnson MedTech.