* Shares rise in cancer companies seen as takeover targets

* Oncogenex shares close up 28.7 pct

* Poniard shares close up 12 pct
(Recasts first paragraph, updates share prices)

By Bill Berkrot

NEW YORK, May 22 (Reuters) - Oncogenex Pharmaceuticals Inc
(OGXI.O: Quote, Profile, Research) shares soared more then 34 percent and other tiny
cancer drug developer stocks rose as investors bet they will
become takeover targets after Johnson & Johnson (JNJ.N: Quote, Profile, Research) said it
would buy another small biotechnology company.

Poniard Pharmaceuticals Inc (PARD.O: Quote, Profile, Research) and Medivation Inc
(MDVN.O: Quote, Profile, Research) shares also enjoyed double-digit percentage gains on
Friday.

Healthcare conglomerate J&J said late Thursday it planned to
buy cancer drug developer Cougar Biotechnology Inc (CGRB.O: Quote, Profile, Research) for
about $930 million, setting off further speculation that large
drugmakers were trolling for biotech bargains, especially in
oncology.

Oncogenex, which is developing a promising prostate cancer
treatment, saw its shares hit a multiyear high. Shares of
Poniard, which is developing a platinum base chemotherapy that
appears to be less toxic than currently available similar
treatments, rose as much as 18.3 percent.

"That has a lot to do with Cougar," said David Martin, an
analyst with Toronto-based Dundee Securities Corp, adding that
Oncogenex recently released impressive data from a mid-stage
study of its prostate cancer drug.

Shares of Cougar competitor Medivation gained as much as
15.2 percent Friday.

"We believe J&J's acquisition of Cougar will bring the
spotlight on MDV3100, which will enter Phase III studies in
hormone-refractory prostate cancer shortly," Wedbush analyst
Kimberly Lee said of Medivation's experimental cancer drug.

Cash strapped biotechs are hoping to grab a share of the
spotlight and the attention of potential partners when they
unveil data next week in Orlando at the American Society of
Clinical Oncology (ASCO) meeting, the year's most important
cancer meeting.

Rodman & Renshaw analyst Simos Simeonidis believes that big
pharmaceutical buyout activity in small- and mid-cap biotechs is
far from over and mentioned both Poniard and Oncogenex as
potential targets.

Given the modest 16 percent premium J&J has offered for
Cougar, Simeonidis believes other suitors could emerge for that
company as well.

"I think Poniard is on a lot of big pharma radar screens,"
Simeonidis said, adding that he is surprised that Oncogenex has
been flying under the radar for so long.

He noted the impressive survival benefit seen in a Phase II
prostate cancer trial from a summary of data released last week.
Full details from the Oncogenex study will be presented at
ASCO.

"The Oncogenex drug is ahead of Cougar," Simeonidis said.
"Oncogenex has shown overall survival benefit. Cougar has only
shown a PSA response, but no survival benefit."

He called the 10-month median overall survival benefit over
standard chemotherapy seen in the Phase II Oncogenex study "a
very significant difference."

Canaccord Adams analyst George Farmer said J&J's willingness
to snap up Cougar ahead of Phase III data would likely spur
investor interest in a lot of other small oncology companies.

Oncogenex shares closed up $4.77, or 28.7 percent, at $21.42
on the Nasdaq after climbing as high as $22.40 earlier in the
day. Poniard shares closed up 44 cents, or 12 percent, at $4.11
after hitting $4.34 earlier, while Medivation shares ended up
$2.53, or 12 percent, at $23.69 also on Nasdaq.
(Reporting by Bill Berkrot; editing by Gunna Dickson and
Matthew Lewis)