Johnson & Johnson (NYSE:JNJ) completed its acquisition of privately held Aragon Pharmaceuticals earlier this week. Plans for the deal were first announced by J&J in June. Buyouts of smaller companies don't always work out that great, but the Aragon pickup should be good for J&J -- and its shareholders. Here are three positives that I see from this latest acquisition.

Source: Johnson & Johnson. 

1. Good fit 
J&J's Zytiga pulled in sales of $961 million in 2012. This year is looking to be even better, with sales for the prostate cancer drug totaling $739 million in just the first six months of 2013. That's the good news. The bad news is that J&J loses patent exclusivity for Zytiga in a little over three years from now.

Aragon's androgen receptor signaling inhibitor ARN-509, which is in phase 2 clinical trials, appears to be a good fit for J&J. Like Zytiga, ARN-509 targets prostate cancer. If eventually approved, the drug could potentially be marketed as a complementary treatment alongside Zytiga. J&J's sales team should be able to easily incorporate the second product into their strategy.

2. Good move to fend off rivals
With Zytiga going off-patent in 2016 and no potential replacement in late-stage studies, J&J has reason to worry about its prostate cancer franchise. Several other companies would love to capture market share from the big drugmaker.

Medivation (NASDAQ:MDVN) is coming on strong with its prostate cancer drug Xtandi. The company, along with partner Astellas Pharma, racked up nearly $158 million in sales for Xtandi during the first half of this year. Like ARN-509, Xtandi is an adrogen receptor inhibitor.

Dendreon (OTC:DNDNQ) is also still plugging away with prostate cancer vaccine Provenge. While Provenge has been a big commercial disappointment since its approval in 2010, Dendreon is making efforts to position the vaccine as part of a regimen that includes rival drugs. The company has a clinical study under way with Provenge in combination with Zytiga and another study in process with Xtandi.

3. Good use of cash
As of the end of June, J&J reported total cash (including cash equivalents and short-term investments) of more than $25 billion. Putting that cash to good use seems like a smart move. I think the purchase of Aragon qualifies as a good use.

J&J paid $650 million up front for Aragon with up to $350 million more to possibly follow if specified milestones are reached. Basically, we're talking about paying at most $1 billion for a prostate cancer program that could realistically bring that much or more in every year if all goes well.

Investors are hoping they get to experience a bit of deja vu with the Aragon acquisition. J&J gained Zytiga with its buyout of Cougar Biotechnology in 2009. The price tag for that purchase? $1 billion. Zytiga made most of that cost back in its first year on the market.

Positively speaking
My view is that J&J's Aragon deal is clearly positive. Furthermore, my view of J&J itself remains very positive. The stock is up 25% so far in 2013. The company continues to deliver solid performance and make smart moves like the one with Aragon that position it well for the future. When you throw in the 3% dividend, J&J continues to look like a very good pick for long-term investors.