Johnson & Johnson has announced a definitive agreement to acquire Aragon Pharmaceuticals, a privately-held pharmaceutical discovery and development company focused on drugs to treat hormonally-driven cancers.

The acquisition includes Aragon's androgen receptor antagonist program. Aragon's lead product candidate is a second generation androgen receptor signaling inhibitor, ARN-509, in phase II development for castration resistant prostate cancer.

Johnson & Johnson will make an upfront cash payment of $650 million, plus additional contingent payments of up to $350 million based on predetermined milestones. The transaction is expected to close in the third quarter.

Aragon will transfer all assets other than its androgen receptor antagonist program to a newly formed company, which Aragon will spin off.  Johnson & Johnson will not have an ownership stake in the new company nor retain any rights to these products or programs. The boards of both Johnson & Johnson and Aragon have approved the transaction.