By Peter Loftus and Denny Jacob

Johnson & Johnson agreed to acquire mental-illness drug developer Intra-Cellular Therapies for about $15 billion, evidence of the pharmaceutical industry's renewed interest in neuroscience bets with vast but unrealized promise.

The deal would add to J&J's portfolio an Intra-Cellular drug branded Caplyta, a pill that treats bipolar depression and schizophrenia. Analysts predict the drug's sales could reach $4 billion a year by 2030 if regulators approve expanding its use to include major depressive disorder.

That would provide a much-needed boost to J&J's pharmaceutical sales as the company fights sales erosion from the loss of patent protection for its blockbuster Stelara treatment for autoimmune disorders.

Intra-Cellular is developing additional drugs for mental illnesses that could further boost sales for J&J if they succeed in testing and are cleared by regulators. The acquisition also includes ITI-1284, a Phase 2 compound being studied in generalized anxiety disorder and Alzheimer's disease-related psychosis and agitation, as well as a pipeline that meshes with J&J's current areas of focus.

"Together, we have an opportunity to impact even more patients living with neuropsychiatric and neurodegenerative disorders, significantly advancing care and helping improve the lives of millions worldwide," Jennifer Taubert, executive vice president and worldwide chairman of innovative medicine at J&J, said on Monday.

Drugs for mental illnesses such as schizophrenia and depression were once huge sellers for drugmakers including J&J and Eli Lilly. Patent expirations, however, cleared the way for lower-cost generic copies, and the science behind finding newer and better treatments largely stalled.

In recent years, scientific advances have led to promising new treatments, and big drugmakers have pursued acquisitions to add them to their portfolios. Bristol-Myers in 2023 struck a deal to pay $14 billion for Karuna Therapeutics, whose schizophrenia drug Cobenfy is expected to generate big sales.

Yet the efforts can be risky. Some of the newer drugs haven't worked. AbbVie made a costly bet on a once-promising schizophrenia drug when it acquired Cerevel Therapeutics for $8.7 billion last year, but the drug missed a key goal in a clinical trial, and AbbVie had to write off nearly half the deal's value.

Shares of Intra-Cellular Therapies surged 34% to $127.48 early Monday.

Under the terms of the agreement, Johnson & Johnson will acquire all shares outstanding of Intra-Cellular for $132 a share cash, through a combination of cash on hand and debt.

The deal is expected to close later this year, the companies said.

Johnson & Johnson said it would provide commentary on any potential impact to adjusted earnings per-share from the deal when it provides its initial full year 2025 guidance during its fourth-quarter earnings call on Jan. 22.

Write to Peter Loftus at Peter.Loftus@wsj.com and Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

January 13, 2025 11:18 ET (16:18 GMT)

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