J&J to pay up to $1 billion in Aragon deal
pharmafile | June 18, 2013 | News story | Research and Development, Sales and Marketing | Aragon, J&J, JJ, Zytiga
Johnson & Johnson could pay as much as $1 billion to buy prostate cancer specialist Aragon Pharmaceuticals.
The acquisition includes Aragon’s androgen receptor antagonist programme, and its lead product candidate ARN-509, currently in Phase II development for castration resistant prostate cancer (CRPC).
Under the terms of the agreement, Johnson & Johnson will make an upfront cash payment of $650 million, plus additional contingent payments of up to $350 million based on reaching predetermined milestones – the transaction is expected to close in the third quarter.
But J&J is not getting everything as privately-held Aragon said in a separate statement that its remaining assets will be spun off to a new company called Seragon Pharmaceuticals before the purchase by J&J. This means that the US healthcare giant will have no share in sales or future developments from this segment.
But it looks as if J&J is interested only in the firm’s prostate cancer portfolio, and specifically ARN-509.
If approved, the drug would be in a competitive market, which includes the likes of Dendreon’s Provenge and Medivation’s Xtandi. But it would nicely complement J&J’s prostate cancer drug Zytiga, which is expected to make blockbuster sales, although its patent life is fairly short.
“The patent for Zytiga expires at the end of 2016 in the US,” said Derrick Sung, an analyst with Sanford Bernstein, in a note to clients.
“ARN-509 would serve the purpose of both extending the longevity of J&J’s prostate cancer franchise as well as providing a potentially complementary therapy to Zytiga,” he wrote.
Peter Lebowitz, global therapeutic area head for oncology at J&J, 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,” Lebowitz added.
Analysts recently found that J&J was the fastest-growing company among big pharma last year, helped in part by eight new medicines that generated over $4 billion in new sales during 2012.
Ben Adams
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