Intra-Cellular Therapies ITCI signed a definitive agreement with pharma bigwig Johnson & Johnson JNJ. Per the terms, the pharma giant will acquire all outstanding shares of ITCI for $132 per share in cash, aggregating to nearly $14.6 billion.

A commercial-stage biotech company, Intra-Cellular is focused on developing and marketing novel drugs targeting neuropsychiatric and neurological disorders.

The acquisition will add ITCI’s sole marketed drug, Caplyta, which is approved for two indications — schizophrenia and bipolar depression. A regulatory filing was submitted to the FDA last month seeking label expansion for this oral therapy in the major depressive disorder (MDD) indication.

ITCI is also developing its pipeline candidate ITI-1284 for multiple indications — generalized anxiety disorder, and Alzheimer's disease-related psychosis and agitation — across several mid-stage programs. Post the acquisition, J&J will add this investigational drug to its pipeline.

The transaction, expected to be completed later this year, is subject to customary closing conditions and clearance from regulatory authorities.

ITCI Stock Performance

Following this news announcement, shares of Intra-Cellular Therapies rallied 34% on Monday. In the past year, the stock has skyrocketed nearly 92% against the industry’s 16% fall.

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How Does the ITCI Buyout Benefit JNJ?

In our opinion, the deal makes sense for J&J, which markets multiple drugs in the neuroscience space. The deal is a strategic fit for the pharma giant’s existing neuroscience franchise, which includes the antipsychotic drug Invega Sustenna and the depression treatment Spravato. JNJ is also developing an investigational oral drug, aticaprant, in a late-stage study for MDD.

While sales of Caplyta have been encouraging, having risen 46% year over year to $481 million in the first nine months of 2024, J&J’s commercial presence and experience in the neuroscience space could help sales grow faster. As the MDD indication provides a much larger and more lucrative market opportunity, a potential approval in this indication could not only help J&J add a potential blockbuster but also be immediately accretive to its earnings post completion of the transaction.

J&J expects to provide the financial impact of this transaction on its adjusted EPS when it provides guidance for the full year 2025 during the Q4 earnings call next week on Jan. 22.

Recently, Intra-Cellular Therapies secured a huge win in a patent litigation case concerning Caplyta. Management signed a settlement agreement with Sandoz SDZNY, which had previously submitted a regulatory filing with the FDA for a generic version of Caplyta before applicable patents expired. This victory protects ITCI’s product sales from generic erosion in the country for treating other central nervous system diseases. Per the settlement terms, Sandoz is allowed to start selling generic versions of Caplyta on July 1, 2040, or earlier under specific conditions.

Intra-Cellular Therapies Inc. Price

Intra-Cellular Therapies Inc. price | Intra-Cellular Therapies Inc. Quote

ITCI’s Zacks Rank

Intra-Cellular Therapies currently carries 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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