After both Actelion (ALIOF), a Switzerland-based biopharmaceutical company, and drug giant Johnson & Johnson (JNJ) confirmed they were in preliminary discussions regarding a potential transaction, other drug companies that have lung disease treatments in their portfolio moved higher today.

WHAT'S NEW: After an early day report from Bloomberg that J&J was in talks with the $19.9B Swiss drugmaker Actelion, both companies confirmed the talks in separate statements. According to the Bloomberg report, Actelion has developed two new lung treatments that are predicted to become blockbusters "over the next three years." Actelion's Opsumit and Uptravi drugs are used to treat pulmonary arterial hypertension or PAH. Industry experts say that bidding may push up the price for Actelion with other companies such as Sanofi (SNY) and Novartis (NVS) seen as potential suitors, the report says.

PRICE ACTION: Shares of Actelion closed up almost 20% to $184 per share while shares of suitor Johnson & Johnson closed up 0.94% in a shortened post holiday session.

OTHER DRUG COMPANIES WITH LUNG TREATMENTS: Shares of Allied Healthcare Products, Inc. (AHPI), Insmed Incorporated (INSM), ProQR Therapeutics N.V. (PRQR), and United Therapeutics Corporation (UTHR) all closed higher today.