Tuesday, May 27, 2008

Takeda's Millions Buy a Lot of Beer

In the 1902 novel Brewster's Millions (updated famously in 1985 in a film starring the great Richard Pryor), a man must spend every penny of a $1 million inheritance within a short span in order to receive a second $7 million inheritance. As you might imagine (particularly in the film version), hilarity ensues.

The Monty Brewster of the biopharmaceutical world these days is clearly Takeda Pharmaceuticals. We're not saying that Takeda is throwing its money around unwisely--in the pharma world, only time will tell. But it's certainly true that in recent months Japan's number one pharma sure hasn't been afraid to spend it, and seems prepared to provide its partners with some very generous deal terms.

In February Takeda took on Japanese rights to a substantial bit of Amgen's pipeline--$200 million up-front--plus an additional late-stage deal with Amgen on the Phase III Phase III motesanib (another $100 million u/f). Last month it was $8.8 billion to acquire Millennium Pharmaceuticals and $50 million up-front for Cell Genesys' GVAX immunotherapy program.

And today the Japanese pharma signed a deal with Alnylam Pharmaceuticals to non-exclusively license the RNA interference pioneer's technology under terms that were certainly not small beer.

In fact, on a conference call today to discuss the companies' new alliance Alnylam CEO John Maraganore remarked that if the innovation gap in the biopharmaceutical world was a thirst, that RNAi was both "the beer and the tap" to quench that thirst. Or something. Really, he had us at beer. Because if his analogy is apt, Takeda just spent enough money to throw one hell of a party.

The terms, as we noted earlier this morning, were generous and along the lines of Alnylam's similarly non-exclusive platform deal with Roche last year, if a bit scaled down to fit the number of therapeutic areas in which Takeda can operate. Alnylam gets $100 million in up-front cash and $50 million in near-term technology transfer payments for a non-exclusive license to its RNAi platform in oncology and metabolic disease, and first right of negotiation on its RNAi programs in Asia (excluding ALN-RSV01) should Alnylam look for a partner there. Alnylam also gets first right of negotiation on any project Takeda decides to shop in the US and more importantly, gets opt-in rights for 50/50 co-dev/co-commercialization deals in the US on up to four Takeda programs of its choosing (exercisable all the way through the start of Phase III), plus the usual gajillion biobucks in development and commercial milestone payments.

It bears repeating that Alnylam has once again struck a Non-Exclusive deal--and can go out and re-license those same therapeutic areas again at any point. That said, on today's call Maraganore essentially laid down some ground rules. "We wouldn't do a platform license for a double-digit upfront payment," he said. "Given the opportunity cost of enabling a partner we have to and will be very discriminate in how we value these kinds of partnership alliances."

In other words, pony up $100 million or it's not worth our time and effort. How many triple-digit deals it can do before its proposition is diluted below the $100 million low-water mark remains to be seen, though we wouldn't bet that they're done yet.

And if you're worried that Takeda is running out of dry powder, don't. The company has plenty of money left to expand the Alnylam deal into additional therapeutic areas (the deal terms allow for bolting on new therapeutic areas at $50 million per) or do the late-stage deal that its analysts are jonesing for.

Still, any deal is more likely to come with a price tag in the range of the Alnylam upfront than the Millennium acquisition. Takeda's CEO Yasuchika Hasegawa told IN VIVO last week that he doesn't "see the necessity of an acquisition of similar magnitude [to Millennium] in the near future." Hasegawa's preference: fill the yawning gaps left by the pending Prevacid and Actos patent expiries via organic growth.

For our in-depth look at Takeda's strategy you'll have to wait for Ellen Licking's IN VIVO feature in June. But it seems Takeda realizes that it was slow to catch on in large molecules--not an uncommon mistake among its pharma ilk--and making a splash in oligonucleotides was high on its list of priorities.

photo from flickr user bob the lomond used under a creative commons license

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