Takeda Opens War Chest with US$8.8-bil. Millennium Acquisition

Takeda Pharmaceutical has unveiled the largest-ever acquisition of a foreign biotech by a Japanese drug-maker, paying US$8.8 billion for Millennium Pharmaceuticals—best known as the manufacturer of leading multiple myeloma drug Velcade (bortezomib). The deal dwarfs even the US$3.9-billion acquisition of another U.S. firm, MGI Pharma, by fellow Japanese operation Eisai in December 2007. That deal was also focused on a bold expansion into biotech (see Japan: 4 March 2008: Eisai Courts Investors with Heavy Bet on New Cancer Medicines).

For Takeda, the deal comes against the backdrop of a significant restructuring of its business operations in the wake of the dissolution of TAP, its joint venture (JV) in the United States with Abbott Laboratories (U.S.; see United States: 19 March 2008: Takeda Moves to Buy Out JV with Abbott). Although the financial details of the break-up of TAP have not been disclosed, Takeda was—at least until today's announcement—sitting on an estimated cash pile of as much as ¥1.8 trillion (US$18 billion). It now seems that this war chest is being put to good use.

Takeda Acquires Novel Medicines in Cancer, Inflammatory Disease

Assuming the friendly takeover goes ahead as planned, the greatest asset that Takeda will immediately inherit is royalties on Millennium's anticancer agent, Velcade (bortezomib), which is co-marketed with Ortho Biotech, a unit of U.S. healthcare giant Johnson & Johnson (J&J). The drug is approved for multiple myeloma (MM) and mantle cell lymphoma in global markets, and—some four years after its approval in Europe—the novel biologic is at last heading towards a full introduction in Japan, Takeda's home market (see Japan: 19 February 2008: Velcade, Alimta Clear First Post-Marketing Hurdle in Japan). Millennium reports that its product generated sales of US$83.5 million in the United States alone in the first quarter, and remains the key revenue driver for the U.S. biotech (see United States: United States: 8 February 2008: Millennium’s Profit Surges on Velcade Milestone Payments).

Velcade treats a type of cancer that is deadly and by no means uncommon; in the United States, the disease's annual incidence is estimated at some 19,900 patients and carries a three-year survival rate of just 33%. While the drug has a very solid market share in advanced cases of the disease, the drug's marketers are pushing hard into a front-line setting, as well as in more newly diagnosed cases (see United States: 1 February 2008: FDA Grants Priority Review for Millennium's Velcade). This is largely because competition in the MM niche is intensifying, mainly as U.S. firm Celgene brings forward its twin thalidomide derivatives, Thalomid and Revlimid. On the positive side, the FDA took a more favourable line on dosing for Velcade in late 2007 (see United States: 16 October 2007: FDA Approves Expanded Label for Velcade). In the longer term, however, Velcade faces challengers in the shape of pipeline candidates such as GlaxoSmithKline's (GSK; U.K.) mapatumumab and Genentech's (U.S.) Avastin (bevacizumab), to name but a few. In the meantime, Velcade is under investigation in a number of other cancer niches (see table).

Plentiful Synergies

However, aside from Velcade, the deal brings a number of important synergies for Takeda—notably at a time when the ink is still drying on its new collaboration with U.S. biotech giant Amgen, the firm behind blockbuster rheumatoid arthritis drug Enbrel (etanercept; see Japan: 4 February 2008: Takeda Posts 7.2% Nine-Month Sales Growth, Signs US$902-mil. Development Deal with Amgen). In inflammatory diseases, the Millennium acquisition brings several Phase II candidates in therapeutic niches that range from asthma to atheroschlerosis, but its most advanced molecules face high-growth areas such as ulcerative colitis and Crohn's disease (MLN-0002, and, in Crohn's, MLN-3126); the U.S. biotech also has MLN-0415, a candidate in the difficult-to-treat niche of inflammatory bowel disease (IBD). In recent times, Takeda has stepped up its activities in ulcerative colitis through its collaboration with Shire (U.K.; see United States: 27 March 2008: TAP Enters Lialda Co-Promotion Agreement with Shire), and this disease area is regarded as having strong potential in Japan, where mesalamine derivatives dominate and the latest generation of biologics has been slow to make an impact so far (see Japan: 9 April 2008: Ajinomoto In-Licenses Ulcerative Colitis Drug for Japan).

Nevertheless, important synergies can be found in cancer, as the new acquisition gives Takeda a strong hand in angiogenesis inhibitors, both through Amgen's AMG-706 (motesanib) and Millennium's early-stage drug tandutinib. Notably, motesanib was regarded as being of sufficient strategic importance to be the subject of a separate deal between the two companies. Cheeringly for Takeda, the latest acquisition also comes after a slew of disappointments on the research front for Takeda, and cancer is no exception here. The Japanese firm was forced to end a deal with Germany firm Merck KGaA on a new monoclonal antibody therapy, matuzumab, earlier this year (see Germany: 18 February 2008: Takeda, Merck KGaA Halt Matuzumab Development); Takeda abandoned its collaboration on BioNumerik's (U.S.) Tavocept in 2006, even though testing continues in Japan (see Japan: 31 March 2008: BioNumerik's Japanese Development Partner Highlights Benefits of Tavocept). Despite the setbacks, the Japanese firm has not been idle, and it gained a position in the race to develop a successful therapeutic vaccine for cancer in the shape of Cell Genesys's (U.S.) Phase III prostate cancer candidate, GVAX. Finally, synthetic peptide anaemia drug Hematide could prove to be a wildcard for Takeda in cancer care; the U.S. FDA has approved further testing in the initial target niche of chronic kidney disease (see United States: 4 April 2008: Welcome News for Takeda as Actos, Hematide Bring Hope).

Outlook and Implications