J&J Plans to Buy Peninsula Pharmaceuticals for $245 Million

Johnson & Johnson (J&J) recently moved to bolster its antibiotic pipeline, announcing plans to purchase privately held biopharmaceutical firm Peninsula Pharmaceuticals for $245 million.

The acquisition will give J&J access to Peninsula's lead product candidate, doripenem, a broad-spectrum antibiotic and a new member of the carbapenem class of beta-lactam antibiotics. Currently being evaluated in six Phase III clinical trials, doripenem has received fast-track status from the FDA for treatment of nosocomial pneumonia and ventilator-associated pneumonia. The deal does not include Peninsula's PPI-0903 candidate, a fifth-generation broad-spectrum cephalosporin. Peninsula plans to spin off PPI-0903 into Cerexa, a newly formed company that won't be owned by J&J.

The cash-for-stock transaction, which is being conducted by J&J subsidiary Ortho-McNeil Pharmaceutical, is expected to close in the second quarter. Upon closing, J&J expects to incur a one-time after-tax charge of approximately $0.08 per share, as substantially all of the purchase price will be expensed as in-process R&D.