In a move to boost its drug pipeline and capture more biotechnology research,

Johnson & Johnson

(JNJ) - Get Report

is reportedly set to acquire

Alza

(AZA)

for more than $12 billion in stock.

Johnson & Johnson is proposing a stock-swap deal that would value Alza at between $42 and $48 a share. Shares of Alza, which traded as high as $47 last November, closed Friday up 9.3%, or $2.55, to $30.05 a share on

New York Stock Exchange composite trading. Shares of Johnson & Johnson closed at $88.21.

The Wall Street Journal

this morning said the healthcare products giant and California-based Alza are in "advanced discussions" that remain at a "delicate stage." Both companies' boards were scheduled to discuss the transaction today, and the movement in stock prices could have some bearing on the fate of the deal, the paper cited sources as saying.

In the mega-merger world of drug companies, Alza has been frequently mentioned as a takeover target, in part because a $7.3 billion deal with

Abbott Laboratories

(ABT) - Get Report

collapsed in 1999 because of regulatory issues. If the current deal goes through, it would be J&J's biggest takeover of another pharmaceutical company. J&J, which has a market value of nearly $123 billion, acquired

Centocor

in 1999 for $4.9 billion.

The

Journal

said Alza's

Concerta

, which treats attention deficit hyperactivity, is one of the main draws for Johnson & Johnson. It also said Alza's biotech research is a main attraction since Johnson & Johnson is the second largest biotech company behind

Amgen

(AMGN) - Get Report

.