J&J Reportedly May Buy Scios for $2 Billion

Johnson & Johnson ( JNJ) reportedly is in advanced talks to acquire biotech outfit Scios ( SCIO) for about $2 billion.

Johnson & Johnson would pay about $45 a share of Scios, representing a 30% premium from its $34.69 close Thursday. In premarket trading, Scios shares surged 25% to $43.25, according to Instinet. Neither Johnson & Johnson nor Scios has issued any statements about the discussions, first reported in Friday's Wall Street Journal. The Journal noted that the two sides haven't agreed on a set price.

Scios has been a coveted commodity among the many Big Pharma players eager to partner up on its promising treatment for rheumatoid arthritis. At the J.P. Morgan H&Q conference last month, Scios Chief Executive Richard Brewer noted that the big drug makers have been paying visits to his company's headquarters.

With today's news, Johnson & Johnson appears to be in the pole position for an out-and-out acquisition, but other candidates may emerge.

The acquisition would be a boon for Johnson & Johnson, which has a history of scooping up smaller fry to keep its drug pipeline filled. Scios has one successful drug already -- Natrecor, a drug that treats patients suffering from congestive heart failure. Natrecor is expected to bring in up to $170 million in revenue this year.

Scios' rheumatoid arthritis treatment -- currently in phase II study -- looks very promising as well. The pill would have an advantage over Amgen's ( AMGN) Enbrel and Abbott's ( ABT) Humira, both of which are injected. The Journal noted that Scios' drug, if approved, would be a good fit with J&J's injected rheumatoid arthritis treatment, Remicade.

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