J&J Takes Smaller Bite

While its rivals are swallowing competitors whole, Johnson & Johnson continues to take smaller bites.

Just 11 days after buying an 18 percent stake in Irish drugmaker Elan Corp. Plc for $885 million, the diversified health care company is taking a similar-size stake in Dutch biotech company Crucell NV for about $442 million.

In July, J&J bought Cougar Biotechnology Inc. for about $1 billion and, in January, acquired breast-implant maker Mentor Corp. for about the same price.

Cobbling together many deals helped J&J become the world's biggest health care company. Though the purchases add up to several billion dollars, J&J so far is resisting the one big transaction like the megamergers between rivals Pfizer Inc.-Wyeth and Merck & Co.-Schering Plough Corp. Abbott Laboratories, which in recent years has become sort of a smaller version of J&J, announced its own big deal today: the $6.6 billion purchase of Solvay SA's drug business.

A big difference between J&J and competitors' acquisitions is the mix of products the New Brunswick, New Jersey, company is getting. The stake in Crucell will allow it to collaborate with that company on a flu vaccine. The Mentor acquisition makes J&J a bigger player in the cosmetic medical products business. In addition to breast implants, Mentor has an antiwrinkle injection similar to Botox that's awaiting U.S. government approval.

With the Elan stake, J&J will collaborate on Alzheimer's research, while the Cougar acquisition is a bet on that company's experimental cancer treatments. It's a multiprong attack that differs from the megadeal. Time will tell which companies made the right transactions.