Johnson & Johnson have confirmed a $1bn cash tender offer to acquire Cougar Biotechnology, a development-stage biopharmaceutical company with a specific focus on oncology.

Cougar Biotechnology, which has compounds in development for the treatment of prostate and breast cancer as well as multiple myeloma, will work with Ortho Biotech Oncology Research & Development, a unit of Centocor Research & Development, a Johnson & Johnson company.

Ortho Biotech Oncology Research & Development global therapeutic head William N Hait said that the acquisition of Cougar Biotechnology would strengthen there position in the global oncology market

“We are developing new treatments that we anticipate will change the course of cancer treatment by targeting the tumour and its microenvironment,” Hait said.

Cougar Biotechnology is conducting two Phase III trials for abiraterone acetate, a late-stage, first-in-class compound for the treatment of prostate cancer.

Under the terms of the agreement, Johnson & Johnson will initiate a tender offer, through a new wholly owned subsidiary, to purchase all outstanding shares of Cougar Biotechnology at $43 per share.

The tender offer is conditioned on the tender of a majority of the outstanding shares of Cougar Biotechnology’s common stock. The closing is conditioned on clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

The $970m estimated net value of the transaction is based on Cougar Biotechnology’s 20.8 million shares outstanding, net of estimated cash on hand at closing. The boards of directors of Johnson & Johnson and Cougar Biotechnology have approved the transaction.