J&J to buy Aragon Pharmaceuticals; deal potential $1 bn

US healthcare company Johnson & Johnson (JNJ) today said that it will acquire Aragon Pharmaceuticals, a privately-held pharmaceutical firm focused on developing drugs to treat hormonally-driven cancers, in a potential $1 billion deal.

Under the deal, JNJ said that it will make an upfront cash payment of $650 million, plus additional contingent payments of up to $350 million based on reaching predetermined milestones.

The deal includes Aragon's androgen receptor antagonist program, but does not include development of Aragon's treatment for breast cancer, which will be spun off into a separate company called Seragon Pharmaceuticals.

Aragon's lead product candidate is a second generation androgen receptor signaling inhibitor, ARN-509, in Phase 2 development for castration resistant prostate cancer (CRPC).

ARN-509 blocks androgen receptor nuclear translocation and DNA binding, thereby modulating the expression of genes critical to tumor growth. This novel mechanism of action coupled with excellent pharmaceutical properties and a high therapeutic index gives ARN-509 the potential to be the best treatment for prostate cancer.

California-based Aragon's investors include Aisling Capital, The Column Group, OribMed, VenBio and topspin.

''The acquisition of Aragon further enhances our leadership in prostate cancer drug development,'' said Peter Lebowitz, head of oncology research for JNJ's Janssen Research & Development unit. ''Prostate cancer is one of our main areas of focus, and we are pleased to be adding ARN-509 to our portfolio.''