Daiichi Sankyo, Japan’s third- largest drugmaker, agreed Tuesday to buy Berkeley-based Plexxikon for as much as $935 million, accelerating its expansion into cancer medicines.
Shareholders of Plexxikon, a closely held company, will receive a one-time payment of about $805 million and as much as $130 million when its most advanced drug, PLX4032 for melanoma, reaches the market, Daiichi said. The acquisition will be internally funded, the Tokyo-based company said.
Buying Plexxikon may enable Daiichi Sankyo to enter the U.S. cancer-drug market as early as 2012, said Atsushi Seki, an equities analyst at Barclays in Tokyo. Daiichi and its Japanese rivals Takeda Pharmaceutical, Astellas Pharma and Eisai are buying promising cancer medicines to tap a global oncology market forecast by IMS Health to expand by as much as 15 percent annually over the next two years.
“The purchase is giving Daiichi Sankyo an opportunity to set up a cancer business quicker than we assumed,” Seki said in a telephone interview. Daiichi will have to hire a sales team to promote the medicine once it’s approved, “but more drugs seem to be coming out of the pipeline to make up for it,” he said.
Regulatory approval to sell PLX4032 in the U.S. and Europe is expected to be sought this year, said Kathleen Sereda Glaub, Plexxikon’s president. The deal is possibly the largest acquisition of a closely held drug-discovery company to date, she said.
Biopharmaceuticals, or protein-based medicines produced from living cells, are being used to target cancer and autoimmune conditions such as rheumatoid arthritis and Crohn’s disease. They comprised 5 of the world’s 10 bestselling medicines last year, according to Bloomberg data.
Cancer-drug sales will expand 12 to 15 percent annually, reaching as much as $80 billion by 2012, according to IMS Health.
Plexxikon is developing PLX4032, also known as vemurafenib, with Basel, Switzerland-based Roche Holding. Roche and Daiichi Sankyo will jointly promote the drug in the U.S. when it is approved for sale, the statement said. Its patent expires in 2029, and patient studies began within three years of its discovery, Plexxikon’s Glaub said.
“This deal made a lot of sense to Daiichi,” she said in an interview Tuesday. The ability for Daiichi Sankyo to co-market PLX4032 “presented them with a near-term opportunity to jump- start what they wanted to do in oncology,” Glaub said.
The medicine, which is taken orally, targets the BRAF gene, a cancer-causing mutation expressed only in tumor cells, including about half of melanomas, 1 in 10 colorectal cancers, and about 8 percent of all solid tumors, Plexxikon said.
Plexxikon will operate as a unit of Daiichi Sankyo, and its 45 employees have been offered to keep their jobs, Glaub said. Plexxikon’s major shareholders include Alta Partners, Advanced Technology Ventures, and Walden International.
