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Johnson & Johnson to Buy Scios for $2.4 Billion

Johnson & Johnson (JNJ - Get Report) confirmed reports it will acquire biotechnology company Scios (SCIO) for cash and stock worth $45 a Scios share, or about $2.4 billion total.

Scios focuses on small-molecule inhibitors, and its potential drugs include several potential treatments for pain and inflammatory diseases. It already sells a drug called Natrecor, for congestive heart failure, which it expects to genrate $170 million in revenue this year.

The transaction has been approved by the boards of both companies but will require government antitrust clearance and an affirmative vote by Scios shareholders. Scios' shares were recently up $1.46, or 3.5%, to $43.66 on the news, after rising 22% on initial reports of the deal Friday.

Johnson & Johnson expects the deal to close in the second quarter and reduce full-year earnings by 5 cents in 2003 and 2004. The company will also record a charge of $700 million, or 23 cents a share, for in-process research and development.

Johnson & Johnson's shares were recently down 27 cents, or 0.5%, to $51.57.

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