Johnson & Johnson (JNJ.US) is in talks to acquire Intra-Cellular Therapeutics, a biopharmaceutical star with a $10 billion market cap, and the merger & acquisition fever in healthcare is heating up!

Johnson & Johnson (JNJ.US) is reportedly in talks to acquire Intra-Cellular Therapies Inc., a biopharmaceutical company focused on treating central nervous system diseases. The negotiations are ongoing, but a deal could be reached as early as this week, though other bidders may emerge.

Representatives for Johnson & Johnson declined to comment, and a spokesperson for Intra-Cellular Therapies was not immediately available to comment.

If announced, the deal would be the largest biotechnology transaction in more than a year, underscoring the resurgence of healthcare deals after a 2024 downturn when large pharmaceutical companies slowed the post-pandemic dealmaking frenzy to digest acquisitions. This month, medical device maker Stryker (SYK.US) agreed to buy Inari Medical (NARI.US) for about $4.9 billion.

Intra-Cellular's shares have risen about 40% in the past 12 months, valuing the company at about $10 billion. Intra-Cellular is developing new therapies for mental and neurological diseases and is in late-stage trials for a drug to treat major depression.

Moreover, Intra-Cellular said last week it had reached a settlement with Sandoz to resolve patent litigation related to its drug Caplyta for bipolar depression, sending the company's shares soaring.

By contrast, Johnson & Johnson's shares have fallen about 12% in the past 12 months, valuing the company at $342 billion. The company has been trying to maintain growth as it faces the risk of losing exclusive rights to its psoriasis treatment Stelara. Johnson & Johnson spun off its consumer health division and acquired Shockwave Medical, a maker of heart devices, for $13.1 billion, and is now back on the offensive.

Nauman Shah, global head of business development for Johnson & Johnson's pharmaceuticals division, said in an interview at the BIO International Convention in June: "We certainly still have the wherewithal and the ability to do deals of any size." "If these deals make sense, we're going to focus on the five deals, and we can even call them $20 billion deals."

Johnson & Johnson's discussions were taking place ahead of the annual healthcare industry gathering in San Francisco. While timing is uncertain, the company typically announces deals around the J.P. Morgan Healthcare Conference.