Alza Corp (Palo Alto, CA) has acquired its next-door neighbor, Sequus Pharmaceuticals (Palo Alto, CA) in a deal worth over $0.5 billion. Sequus stock price jumped 40% when the deal was announced. Combining the two drug-delivery companies is intended to strengthen Alza's oncology and urology divisions and will also bring on board Sequus's Doxil treatment for AIDS-related Kaposi's sarcoma, which has estimated sales of $45 million in 1998. According to Anneke Cole, a company spokesperson, Alza has sought a deal like this for several years to establish itself in oncology. However, the timing of the deal is linked to Doxil showing promise in other types of cancer. "Doxil is now in phase III trials for ovarian cancer and phase II/III trials for breast cancer," says Cole. In a stock swap, Sequus shareholders will receive 0.4 shares of Alza stock for each Sequus share they have. Finalization of the deal is expected by early 1999, following Sequus shareholder approval.