Chiron ( CHIR) beefed up its oncology unit Tuesday, announcing that it purchased privately held Sagres Discovery, a Davis, Calif., company specializing in the discovery and validation of potential cancer fighters.

Financial terms of the deal were not announced, but Chiron said the acquisition would better position it to discover and capitalize on new cancer treatments. Sagres is best known for Oncogenome, a comprehensive look at the genes that cause cancer, which can cut down on the time needed to develop drugs.

"This is a unique opportunity to advance our goal of building a competitive, balanced pipeline for Chiron," said Kenneth Bair, head of research at Chiron. "With the wealth of targets from Sagres, we expect to be able to maximize the value of our collaboration with Xoma ( XOMA) and our small molecule drug discovery program."

In reaction, shares of Chiron fell 13 cents, or 0.3%, to $44.27, while Xoma, which announced a pact to work on cancer treatments four months ago, fell 7 cents, or 1.5%, to $4.43.

The acquisition is the latest for Chiron and could have investors skittish. In the first quarter, the company's earnings were much lower than last year and missed Wall Street expectations by five cents a share, because of higher costs related to the company's acquisition of PowderJect Pharmaceuticals.

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