Cravath Swaine & Moore and Davis Polk & Wardwell have been called in to guide Johnson & Johnson’s (J&J’s) $14.6bn acquisition of neurological drug maker Intra-Cellular Therapies. 

Cravath is acting for J&J on the deal – its largest in more than two years – while Davis Polk is advising Intra-Cellular. 

The Cravath team is led by partners Robert Townsend III, Ting Chen and Jin-Kyu Baek on M&A matters. It also includes partners J. Leonard Teti II and Andrew T. Davis on tax matters; Matthew Bobby on executive compensation and benefits matters; Sasha Rosenthal-Larrea on intellectual property matters; and Matthew Morreale on environmental matters.

Cravath is a longtime advisor to J&J. In recent years Townsend, who co-chairs the firm’s global M&A practice, has led Cravath teams that guided the company on its $16.6bn acquisition of heart pump-maker Abiomed and its $6.5bn acquisition of Momenta Pharmaceuticals. He also helmed the team that advised J&J on the spinoff of its consumer health unit last year. 

Meantime, the Davis Polk team advising Intra-Cellular is led by M&A partners Michael Davis and Lee Hochbaum. The team also includes partners Veronica Wissel (executive compensation); Jesse Solomon (antitrust and competition); David Bauer (intellectual property); and William Curran (tax).

The Intra-Cellular deal will give J&J access to the company’s drug Calypta, which is used in the US to treat schizophrenia and depressive episodes associated with bipolar disorder. The drug is expected to bring in more than $1bn in sales next year, Reuters reported, while some analysts expect it will not face generic competition until 2040. 

J&J has offered to buy each share of Intra-Cellular for $132, representing a 39% premium to the stock’s closing price on Friday. Shares of Intra-Cellular rose 34% to $128 in afternoon trading, while J&J rose 1.5%. The company expects to fund the transaction through a combination of cash on hand and debt. 

The deal is expected to close later this year. Citi is serving as financial advisor to J&J on the matter, while Centerview Partners and Jefferies are serving as financial advisors to Intra-Cellular. 

Davis Polk ranked eighth in LSEG’s M&A global legal advisor league tables for 2024, working on 154 deals worth $260.8bn; the year before it was placed second behind Kirkland & Ellis. Meantime, Cravath’s work on 59 deals worth $191.7bn saw it rise one place to 13th.

Worldwide M&A activity totalled $3.2trn in 2024, an increase of 10% from 2023, although still a huge decrease on 2021’s record high of $5.9trn.