- The Washington Times - Monday, February 10, 2003

NEW BRUNSWICK, N.J., Feb. 10 (UPI) — Healthcare giant Johnson & Johnson said Monday it has signed a definitive agreement to acquire Sunnyvale, Calif.-based Scios Inc. in a deal valued at $2.4 billion.

Under terms of the deal, Scios shareholders will receive $45 for each outstanding Scios share. Scios has approximately 59.8 million shares outstanding.

The boards of directors of Johnson & Johnson and Scios have given their approval to the deal, which is subject to clearance under the Hart-Scott-Rodino Anti-Trust Improvements Act.

This deal is also subject to the approval of the shareholders of Scios and other customary closing conditions.

Scios is a biopharmaceutical company developing treatments for cardiovascular and inflammatory disease. The principal focus of Scios' research and development program is small molecule inhibitors, and includes several potential new treatments for pain and inflammatory diseases, including an advanced kinase inhibitor program.

Christine Poon, worldwide chairman, pharmaceuticals group, Johnson & Johnson, said, "Scios strengthens our growing cardiovascular franchise and broadens our pipeline with several potential new chemical entities. Scios also brings an advanced research program on kinase inhibitors, which is an exciting new area of research."

Richard B. Brewer, president and chief executive officer of Scios, said, "This is an important strategic transaction for Scios, further strengthening our organization's financial and operational capabilities for the long-term and achieving for our shareholders an immediate premium cash return on their investment.

"Becoming part of Johnson & Johnson is ideal for Scios both culturally and scientifically. We share common values and vision," Brewer added.

Johnson & Johnson said the deal, which is expected to close in the second quarter, is also expected to have a 5 cent dilutive impact in 2003 and 2004. In addition, an estimated one-time charge of approximately $700 million for in-process research and development will have an earnings per share impact of 23 cents a share.

In January, Bob Darretta, chief financial officer of Johnson & Johnson, provided guidance that he endorsed the 2003 First Call Consensus estimate of $2.62. Darretta has indicated that the company expects to fund the dilution associated with this transaction and recommends that 2003 full year earnings per share estimates remain the same, excluding one-time charges.

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