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J&J to buy Cougar for $1 billion

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BOSTON (MarketWatch) — In a move it says will bolster its portfolio of oncology drugs, Johnson & Johnson said late Thursday it has agreed to buy Cougar Biotechnology for about $1 billion in cash.

J&J (JNJ) said it plans to commence a cash tender offer for the oncology drugmaker, offering $43 a share. The boards of both companies have agreed to the deal.

Shares of Cougar (CGRB) were up about 16% at $42.81. J&J shares were up nominally at $55.04.

Cougar’s lead product, abiraterone acetate, is currently in Phase III clinical testing for the treatment of prostate cancer. The company is also developing compounds to treat breast cancer and the blood disease multiple myeloma.

J&J already markets a treatment for multiple myeloma with Takeda Pharmaceutical Co. called Velcade.

J&J said the deal, which is expected to close in the third quarter, will be dilutive to its 2009 earnings per share by 2 cents to 3 cents.

Once acquired, Cougar will work with J&J’s Ortho Biotech Oncology unit, which in turn operates under the auspices of J&J biotechnology division, Centocor.

J&J owns more than 250 companies in 57 nations. It is the world’s largest diversified health-care company, with 2008 revenue of $63.75 billion.

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