Mergers and Acquisitions

Date: 2015-02-23

Type of information: Company acquisition

Acquired company: Heptares Therapeutics (UK)

Acquiring company: Sosei (Japan)

Amount: up to $ 400 million

Terms:

* On February 23,2015, Sosei Group, a leading Japanese biopharmaceutical company with operations in Japan and the UK, announced that it has acquired Heptares Therapeutics, a clinical-stage private UK-based biotechnology company focused on creating novel medicines targeting G protein-coupled receptors (“GPCRs”). Sosei has acquired 100% of Heptares’ share capital for $ 180 million in cash consideration and up to $ 220 million contingent upon the successful progression of the company’s pipeline and platform. Sosei was advised by Moelis & Company and Clifford Chance LLP. Heptares was advised by Goldman Sachs International and Covington & Burling LLP.

The Group will continue to be led by Shinichi Tamura as Chairman and CEO. Dr Malcolm Weir, Heptares co-founder and CEO, will remain as CEO of Heptares, which will be managed as an autonomous subsidiary of the Group. Dr Weir will also join the enlarged Group as Chief R&D Officer and will be responsible for worldwide research and development outside Japan. Dr Declan Doogan and Peter Bains, currently serving as non-executive directors on the Group’s main Board, will join the Heptares Board representing the Group’s interest. Dr Fiona Marshall, co-founder of Heptares and CSO, will also join the Heptares Board.

Details:

The acquisition of Heptares, with its clinical and preclinical pipeline of potentially transformative new medicines targeting serious diseases with major unmet need (e.g. Alzheimer’s disease, ADHD, metabolic disease, schizophrenia, migraine, and others), and its differentiated and high potential StaR® drug discovery platform further represents a major step towards Sosei’s strategic vision of becoming a significant global biopharmaceutical company arising from Japan.

In addition to its pipeline and platform, Heptares has established collaborative partnerships with a number of the world’s leading pharmaceutical companies that provide the company with a prospective stream of revenue through milestones and royalties. Heptares was founded in 2007 based on the pioneering work of its founding scientists Richard Henderson and Christopher Tate at the MRC Laboratory of Molecular Biology (Cambridge, UK), with investment from MVM Life Science Partners and led by co-founders Malcolm Weir and Fiona Marshall. From these origins, and with additional venture funding from MVM, Clarus Ventures, Novartis Venture Fund, Takeda Ventures and the Stanley Family Foundation, Heptares has moved on to develop its unique StaR® technology platform that enables it to design drugs precisely based on a detailed understanding of the structure of the drug target – an approach known as structure-based drug design (SBDD). By this method, Heptares aims to design and develop superior medicines that are more effective, with better selectivity and fewer side effects. Heptares applies this approach primarily to GPCRs – a superfamily of membrane proteins found in every cell in the body that are crucial to communication between cells. Their central role in many biological processes means that they are important targets for drugs: GPCRs are the site of action of about 40% of currently marketed drugs. The potential of the Heptares platform for both discovery of novel, differentiated small molecules and biologics, is therefore very high.

Heptares’ pipeline of first-in-class or superior next-generation therapeutics includes:

Besides the above-mentioned programmes, the enlarged product portfolio of the Group will also include two COPD products, Seebri® Breezhaler® and Ultibro® Breezhaler®, developed and marketed in the EU, Japan, etc. (NDA submitted in the US) by licensing partner Novartis, SO-1105, a Phase III product indicated for oropharyngeal candidiasis, and four early stage products

In addition to in-house development, Heptares has leveraged the capabilities of its proprietary StaR® technology to sign partnership agreements with a number of the world’s leading pharmaceutical and biologics companies, including AstraZeneca, Cubist (Merck), Takeda Pharmaceutical, MorphoSys, MedImmune and Novartis. These existing partnerships have provided more than USD 30 million in upfront and milestone payments to-date and are expected to continue generating revenues through milestone payments and royalties over the coming years and beyond the expiration of the Group’s COPD products patents in 2026. New pipeline products and alliance deals will likewise generate income for many years to come.

The Heptares platform will complement the existing technologies of the Group subsidiaries: Activus’ nanoparticle technology (APNT), and Jitsubo’s novel peptide manufacturing technology (Molecular Hiving™) and peptide modification technology (Peptune™). Together, these technologies are expected to generate synergies in the effort to identify new compounds, and to further strengthen the pipeline and enhance corporate value.

Related:

Metabolic diseases

Neurologic diseases

Neurodegenerative diseases

Rare diseases

Is general: Yes