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J&J To Buy Privately-held Aragon Pharma For Up To $1 Bln

JohnsonNJohnson 061713

Healthcare giant Johnson & Johnson (JNJ) said Monday that it has agreed to acquire Aragon Pharmaceuticals, Inc., a privately-held company focused on drugs to treat hormonally-driven cancers, in a deal for up to $1 billion.

The acquisition includes Aragon's lead product candidate, currently in mid-stage development for castration resistant prostate cancer or CRPC. Johnson & Johnson noted that prostate cancer is one of its main areas of focus.

Under the terms of the deal, Johnson & Johnson will make an upfront cash payment of $650 million, plus additional contingent payments of up to $350 million based on Aragon reaching pre-determined milestones. The companies expect the transaction to close in the third quarter of 2013.

Johnson & Johnson's acquisition includes Aragon's androgen receptor antagonist program. Aragon's lead product candidate is a second generation androgen receptor signaling inhibitor, ARN-509, currently in Phase 2 development for CRPC.

Aragon said that prior to closing of the deal, it will transfer all assets other than its androgen receptor antagonist program to a newly-formed company called Seragon Pharmaceuticals that will be spun off by it.

Seragon will be focused primarily on Aragon's Selective Estrogen Receptor Degrader or SERD platform, including ARN-810, its lead SERD currently being evaluated in a Phase I trial for estrogen receptors + metastatic breast cancer.

Seragon will be based in San Diego, California, and will be financed by the current Aragon investors. The company will retain members of the Aragon management team including, Richard Heyman, current chief executive officer of Aragon, who will become Seragon's CEO.

Johnson & Johnson will not have an ownership stake in the new company and will not retain any rights to these products or programs.

Commenting on the deal, Peter Lebowitz, Global Therapeutic Area Head, Oncology for Janssen Research & Development, LLC said, "The acquisition of Aragon further enhances our leadership in prostate cancer drug development. ARN-509 complements Zytiga and provides the potential for exciting, novel approaches to treat prostate cancer patients. Prostate cancer is one of our main areas of focus, and we are pleased to be adding ARN-509 to our portfolio."

Janssen Research & Development, one of the Janssen Pharmaceutical Companies of Johnson & Johnson, is headquartered in Raritan, New Jersey, and has affiliated facilities in Europe, the U.S. and Asia.

In the most recent first quarter, Johnson & Johnson reported that sales of its newly-launched prostate cancer drug Zytiga surged 72 percent from the year-ago period to $344 million.

Prostate cancer is the second most common cause of cancer death in men in the U.S. About one in every six American men will be diagnosed with the disease during his lifetime and approximately 29,000 men die annually from the disease in the U.S.

JNJ closed Friday's trading at $84.91 on a volume of 6.36 million shares.

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