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Amgen to sell Takeda drug rights for up to $1.2 bln

Amgen will also sell Takeda its Japanese unit for an undisclosed amount.

Amgen has been eager to cut costs, hit by a sharp decline in its top-selling anaemia drug Aranesp on safety concerns. The world’s biggest biotech firm by sales announced major belt-tightening measures last year, including a cut of up to 14 percent in its work force.

Takeda, Japan’s biggest drug maker, has been under pressure to step up M&A and licensing deals, particularly since a drug setback late last year and after Eisai Co Ltd outshone it with its $3.9 billion acquisition of cancer specialist MGI Pharma.

The companies said Takeda, best known for its diabetes drug Actos, would develop and commercialise up to 13 drug candidates for the Japanese market, paying Amgen $200 million cash up front and up to $702 million in research costs and milestone payments.

All of the 13 drugs are biotech and are in clinical development. The majority are cancer treatments, such as colorectal cancer drug Vectibix which has been approved in the United States. They also include potential treatments for rheumatoid arthritis and asthma.

Initial reaction to the deal was, however, not overly enthusiastic.

‘Takeda needs more biotech drug candidates, so this is a good thing but having said that-in this deal, for all but one of the drugs, Takeda has gained only the Japan rights,’ Hiroshi Tanaka, senior analyst at Mizuho Securities.

‘So it’s hard to get too excited about it.’

Takeda will also become Amgen’s worldwide partner for an experimental cancer treatment, paying another $100 million upfront and up to $175 million in milestone payments.

Amgen said the deal was not a decision to pull out of the Japan market-an expensive and complex market for many foreign drug makers-but rather a decision to not go it alone.

‘It will allow us to get into the Japanese market in a bigger and faster way,’ Dominique Monnet, Amgen’s vice president for global marketing, said in a telephone interview, adding that similar deals in other markets were also possible.

‘I would not exclude it,’ he said. ‘We remain pragmatic.’

Other financial terms that were not disclosed include Takeda’s development expenses in Japan for the 13 drug candidates and Takeda’s development expenses for the cancer treatment, which is called motesanib diphosphate.

Motesanib diphosphate is in Phase III or late-stage trials in Europe and the United States for the treatment of non-small cell lung cancer and in mid-stage trials in Japan.

Amgen’s Japan unit employs about 100 full-time staff, most of which are involved in research and development.

Amgen said that financial guidance given on Jan. 24 for unadjusted earnings per share would not be changed by the deal.

Takeda said that while the upfront cash payments were not budgeted in its planned R&D outlays for this business year to end-March, it would not need to change its annual earnings outlook.

The companies announced the deal after the close of Tokyo trade but a earlier newspaper report that an announcement was imminent failed to lift Takeda’s share price.

It ended down 0.6 percent at 6,340 yen compared with 0.2 percent decline for the pharmaceutical subindex IPHAM.