Johnson & Johnson said on Monday it will repurchase up to $10 billion of its common stock in the largest buyback in its history, sending its shares almost 2 percent higher.

The company -- which makes an array of prescription drugs, medical devices and consumer products -- said the repurchase program has no time limit and that shares would be bought on the open market based on market conditions.

J&J, which is based in New Brunswick, New Jersey, has almost 2.9 billion shares outstanding. It will finance the stock repurchases through a combination of available cash and debt.

Company spokesman Jeffrey Leebaw declined to comment on the stock buyback plan, saying J&J officials will discuss it with investors during a second-quarter earnings conference call on July 17.

The company completed a $5 billion stock-repurchase plan in the fourth quarter of 2006, Leebaw said. It had been announced earlier that year.

J&J's profit growth has slowed in the past year amid generic competition for its Duragesic pain patch and disappointing demand for its Procrit anemia drug and Cypher stent, used to prop open heart arteries that have been cleared of plaque.

Kent Croft, a portfolio manager of the Croft-Leominster funds, speculated J&J has decided it is better to boost earnings through stock buybacks than try to do so through acquisitions of products or companies that might prove too costly.

Stock repurchases could help them bridge some of the earnings gap until they can get new products onto the market, Croft said. I'd rather them do it this way than make acquisitions simply for acquisitions' sake.

Morgan Stanley analyst Glenn Reicin said the stock buybacks could boost J&J's annual earnings by about 11 cents per share.

But Reicin said the stock repurchases would not preclude J&J from making more acquisitions. He noted that J&J announced its recently completed $16 billion purchase of Pfizer Inc.'s consumer health-care products after putting its previous stock-buyback plan into motion.

Shares of J&J closed up 59 cents, or almost 1 percent, to $62.72 on the New York Stock Exchange amid a slight decline for the drug sector.