Pharmabiz
 

Johnson & Johnson to acquire Cougar Biotechnology for about $1 bn

New Brunswick, New JerseySaturday, May 23, 2009, 08:00 Hrs  [IST]

Johnson & Johnson and Cougar Biotechnology Inc, a development stage biopharmaceutical company with a specific focus on oncology, announced a definitive agreement whereby Cougar Biotechnology will be acquired for approximately $1.0 billion in a cash tender offer. Cougar Biotechnology, which has compounds in development for the treatment of prostate cancer, as well as breast cancer and multiple myeloma, will work with Ortho Biotech Oncology Research & Development, a unit of Centocor Research & Development, Inc, a Johnson & Johnson company. Under the terms of the agreement, Johnson & Johnson will initiate a tender offer, through a new wholly-owned subsidiary, to purchase all outstanding shares of Cougar Biotechnology at $43 per share. The tender offer is conditioned on the tender of a majority of the outstanding shares of Cougar Biotechnology's common stock. The closing is conditioned on clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. The $970 million estimated net value of the transaction is based on Cougar Biotechnology's 20.8 million shares outstanding, net of estimated cash on hand at closing. The boards of directors of both Johnson & Johnson and Cougar Biotechnology have approved the transaction. Cougar Biotechnology is currently conducting two phase-III trials for abiraterone acetate, a late stage, first-in-class compound for the treatment of prostate cancer. The first phase-III trial is testing abiraterone acetate in patients with metastatic, castration-resistant prostate cancer who have progressed after docetaxel-based chemotherapy has failed. The second phase-III trial is studying abiraterone acetate in patients with metastatic, castration-resistant prostate cancer who have yet to receive chemotherapy. One in six men will be diagnosed with prostate cancer in his life-time, and the disease accounts for 10 per cent of cancer-related deaths in the United States. "The acquisition of Cougar Biotechnology with its talented team will strengthen our growing capabilities toward a leadership position in the global oncology market," said William N Hait, Global Therapeutic head, Oncology, Ortho Biotech Oncology Research & Development. "We are developing new treatments that we anticipate will change the course of cancer treatment by targeting the tumour and its microenvironment and thereby will provide a meaningful difference in the lives of millions of patients worldwide." Alan H Auerbach, chief executive officer, president and founder of Cougar Biotechnology, said, "Since the founding of Cougar approximately six years ago, our employees have been relentlessly dedicated to the development of innovative oncology drugs and the creation of shareholder value. We believe that this transaction strongly positions abiraterone acetate for future success with a leading healthcare company that has the expertise, resources, dedication and motivation to deliver it to the cancer patients who need it." Upon closing, the transaction is expected to have a dilutive impact to Johnson & Johnson's 2009 earnings per share of approximately $.02 to $.03. The transaction is expected to close in the third quarter of 2009. Cougar Biotech is a Los Angeles-based biotechnology company, established to in-license and develop clinical stage drugs, with a specific focus on the field of oncology.

 
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