New J&J deal has teeth

May 22, 2009 – 3:44 pm by Michael Christel

M&A fever has cooled off some in recent weeks, but just in time to wet your Memorial Day weekend appetite, a juicy little deal was served up yesterday. Johnson & Johnson has agreed with Cougar Biotechnology Inc. to acquire the California-based company for about $1 billion in cash, or $43 a share, in a move to beef up J&J’s oncology pipeline. Cougar has drugs in development to treat prostate cancer, breast cancer, and multiple myeloma. However, it’s the potential of the company’s late-stage prostate cancer candidate, abiraterone acetate, that makes the deal particularly intriguing for J&J, analysts say.

Abiraterone, which was included in R&D Directions’ annual compilation of  “100 great investigational drugs” in the magazine’s March issue, is presently being tested in a pair of Phase III trials, one in patients with metastatic, castration-resistant prostate cancer who have progressed after chemotherapy has failed, the other in patients who have yet to receive chemotherapy. According to stats cited by Cougar, one in six men will be diagnosed with prostate cancer in his lifetime, and the disease accounts for 10% of cancer-related deaths in the United States.

Cougar will present data from three Phase II trials of Abiraterone in pre- and post-chemotherapy prostate cancer patients at next week’s ASCO meeting in Orlando.

The J&J-Cougar deal is expected to close in the third quarter. Cougar will work with Ortho Biotech Oncology R&D, a unit of Centocor R&D, which is a J&J company. Earlier this month, Cougar reported a first-quarter loss of $23.3 million on higher R&D costs related to abiraterone.