By Austen Hufford

Swiss biopharmaceutical company Actelion Ltd. said Friday that it had been approached by Johnson & Johnson about a possible deal.

As of Wednesday's close, Actelion had a market value of about 16.7 billion Swiss francs ($16.4 billion). With a typical takeover premium of 25% or more, a deal for the company would be valued at more than $20 billion. Johnson & Johnson's market value is more than $300 billion.

Shares of Actelion rose 16%to 182.40 Swiss francs on the SIX Swiss Exchange.

J&J confirmed Friday that it is in "preliminary discussions" with Actelion. It isn't clear where talks between the companies stand or whether Actelion is receptive.

Actelion makes drugs for rare diseases, with a focus on pulmonary arterial hypertension, or PAH, a type of high blood pressure that affects arteries in the lungs and in the heart.

Actelion was founded in 1997 by Jean-Paul Clozel and other former Roche Holding Ltd. employees who left the Swiss drug giant after it decided not to pursue a project their group was working on, according to its website. In 2000, Actelion went public and its valuation has climbed sharply since then.

Last year, the company reported revenue of 2.05 billion francs and a profit of 551.9 million francs.

Johnson & Johnson, based in New Brunswick, N.J., makes an array of products from baby soap to Tylenol pills and devices that managediabetes care.

The company has been acquisitive as of late. In September, it reached a deal to buy Abbott Laboratories' eye-surgery equipment business for $4.3 billion.

Bloomberg had reported Thursday that J&J had made an initial bid for the specialty drug company.

Shares of J&J rose 0.7% to $113.91 in morning trading in the U.S.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

November 25, 2016 12:18 ET (17:18 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.