Johnson & Johnson announced it will buy San Diego-based Aragon Pharmaceuticals Inc. for up to $1 billion.

The privately held Aragon will receive an initial payment of $650 million, and additional $350 million in milestone payments could follow from J&J, the New Brunswick, N.J.-based pharmaceutical giant said in a news statement.

Aragon is developing an experimental prostate cancer drug, as well as a whole pipeline of treatments for hormonally driven cancers.

Aragon announced two investment rounds totaling $92 million last year. This is on top of some $30 million invested in the company since it was founded in 2009.

Before closing, Aragon said it will spin off an independent, newly formed corporation called Seragon Pharmaceuticals, which will use some of Aragon’s technology to develop a breast cancer treatment.

— Meghana Keshavan