On January 8, 2024 Johnson & Johnson (NYSE: JNJ) reported that it has entered into a definitive agreement to acquire Ambrx Biopharma, Inc., or Ambrx (NASDAQ: AMAM), a clinical-stage biopharmaceutical company with a proprietary synthetic biology technology platform to design and develop next-generation antibody drug conjugates (ADCs), in an all-cash merger transaction for a total equity value of approximately $2.0 billion, or $1.9 billion net of estimated cash acquired (Press release, Johnson & Johnson, JAN 8, 2024, View Source [SID1234639134]).

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Ambrx is advancing a focused portfolio of clinical and preclinical programs designed to optimize efficacy and safety of its candidate therapeutics in multiple cancer indications, including ARX517, its proprietary ADC targeting PSMA for metastatic castration-resistant prostate cancer (mCRPC); ARX788, its proprietary ADC targeting human epidermal growth factor receptor 2 (HER2) for metastatic HER2+ breast cancer; and ARX305, its proprietary ADC targeting CD-70 for renal cell carcinoma.

"Ambrx’s ADC technology offers unique advantages in the conjugation of stable antibodies and cytotoxic linker payloads, which results in engineered ADCs that effectively kill cancer cells and limit toxicities," said Yusri Elsayed, M.D., M.H.Sc., Ph.D., Global Therapeutic Area Head, Oncology, Johnson & Johnson Innovative Medicine. "The results seen to date with ARX517 in mCRPC are promising and represent a potential first- and best-in-class targeted therapy for the treatment of this aggressive disease. In addition, Ambrx’s pipeline and ADC platform present exciting future opportunities to deliver enhanced, precision biologics as we look to transform the treatment of cancer and improve patients’ lives."

The planned acquisition presents a distinct opportunity for Johnson & Johnson to design, develop and commercialize targeted oncology therapeutics. Ambrx’s proprietary ADC technology incorporates the advantages of highly specific targeting monoclonal antibodies securely linked to a potent chemotherapeutic payload to achieve targeted and efficient elimination of cancer cells without the prevalent side-effects typically associated with chemotherapy. Building on a legacy of innovation in oncology and in prostate cancer, J&J scientists intend to work with Ambrx researchers, accelerating the Phase 1/2 APEX-01 study (NCT04662580) of ARX517 in advanced prostate cancer, while progressing a pipeline of novel ADC product candidates.

"With a median overall survival of less than two years and novel hormonal therapies moving earlier in the disease, significant unmet need remains in the treatment of mCRPC," said Margaret Yu, M.D., Prostate Cancer Disease Area Leader, Johnson & Johnson Innovative Medicine. "We see a unique opportunity to harness the potential of this innovative ADC platform, and with our deep understanding of prostate cancer, deliver a targeted PSMA therapeutic for addressing the growing needs of the more than 185,000 patients living with metastatic castration-resistant disease today1."

Ambrx was spun out of The Scripps Research Institute in 2003. The company pioneered the expanded genetic code technology platform for incorporation of synthetic amino acid (SAA) into proteins at any selected site using industry standard cell lines. SAAs allow engineered precision biologics with site-specific, homogenous and stable conjugation, overcoming limitations of traditional conjugation technologies.

About the Merger Agreement

Under the terms of the transaction, which was approved by the Johnson & Johnson Board of Directors, Johnson & Johnson (the Company) will acquire all of the outstanding shares of Ambrx’s common stock for $28.00 per share in cash through a merger of Ambrx with a subsidiary of the Company. The closing of the transaction is expected to occur in the first half of 2024, subject to receipt of Ambrx shareholder approval, as well as clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. The approximately $1.9 billion estimated net value of the transaction is based on Ambrx’s estimated fully diluted shares outstanding, less estimated net cash at the time of closing. Following completion of the transaction, Ambrx’s common stock will no longer be listed for trading on the NASDAQ Global Select Market.

The accounting treatment as a business combination or asset acquisition will be determined on or before the expected close of the transaction.