UPDATE 1-Johnson & Johnson to acquire Proteologix for $850 million

(Adds details on Proteologix's drug in paragraph 2, and J&J drug in paragraph 4)

May 16 (Reuters) - Johnson & Johnson said on Thursday it would acquire Proteologix for $850 million in cash, as it looks to gain access to the privately held company's experimental atopic dermatitis treatments.

Proteologix's antibody PX128 is ready to enter early-stage development for moderate to severe atopic dermatitis, commonly referred to as eczema, and moderate to severe asthma. PX130, its other antibody, is in preclinical development for moderate to severe atopic dermatitis.

Atopic dermatitis is a chronic inflammatory skin disorder that causes damage to the skin barrier, leaving it dry, itchy, and prone to skin infections.

J&J's experimental atopic dermatitis drug is in mid-stage development, according to its website.

The transaction is expected to close in the next few months, subject to antitrust clearance and other customary closing conditions.

The deal also has potential for an additional milestone payment, J&J said.

(Reporting by Sriparna Roy in Bengaluru; Editing by Anil D'Silva and Shinjini Ganguli)