Johnson & Johnson said today it will acquire Aragon Pharmaceuticals for up to $1 billion, in a deal that will grow the pharma giant’s prostate cancer portfolio by adding a drug candidate that is now the subject of a Phase II clinical trial.

J&J said it will shell out $650 million up-front, and up to $350 million in future payments tied to undisclosed milestones. In return, J&J will acquire Aragon, a developer of drugs for hormone-driven cancers, and its lead drug candidate ARN-509, a second-generation androgen receptor antagonist now under study as a possible treatment for castration-resistant prostate cancer (CRPC).

“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,” said Peter F. Lebowitz, M.D., Ph.D., global therapeutic area head, oncology for Janssen Research & Development. “Prostate cancer is one of our main areas of focus, and we are pleased to be adding ARN-509 to our portfolio.”

Over the next two years, J&J plans to file for marketing authorization for siltuximab, a chimeric monoclonal antiobody investigated for a variety of cancers including prostate cancer. The pharma giant’s current offerings include Zytiga (abiraterone acetate), a metastatic CRPC treatment on its way to blockbuster status. Sales of the drug more-than-tripled last year, to $961 million from $301 million in 2011, in part after FDA and the European Commission approved an expanded indication in combination with prednisone that allows for use of Zytiga before chemotherapy in treating mCRPC.

Not included under the deal are any of Aragon’s other assets, which will be spun out of Aragon before its acquisition by J&J, into a new company to be named Seragon Pharmaceuticals and headed by Richard Heyman, Ph.D., now Aragon’s president and CEO.

Those other assets include the experimental breast cancer treatment ARN-810. In April, Aragon said the first patient had been dosed in a Phase I clinical study of the oral selective estrogen receptor degrader (SERD) for locally advanced or metastatic estrogen receptor positive breast cancer in post-menopausal women.

J&J said it will neither hold any stake in Seragon nor retain any rights to ARN-810 or any experimental drug program. In addition to ARN-810 and -509, Aragon is using its discovery platform to identify selective androgen receptor degraders (SARDs) for castration-resistant prostate cancer.

The acquisition is set to close during the third quarter, according to J&J, subject to early termination of the Hart-Scott-Rodino waiting period, Aragon’s spinout of Seragon, and customary closing conditions. The boards of both J&J and Aragon have approved the deal. 

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