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April 07, 2016 at 06:21 AM
(Bloomberg) Allergan PLC (NYSE:AGN), rebounding from the collapse of its planned merger with Pfizer Inc. (NYSE:PFE), said it will pay $125 million upfront to a unit of Japan’s Sosei Group for rights to a portfolio of treatments for neurological disorders including Alzheimer’s disease.
See also: Pfizer, Allergan $160 billion deal killed by U.S. tax rules
Dublin-based Allergan said in a statement that it also may pay Heptares Therapeutics as much as $665 million in milestone fees for the successful development and launch of the first three licensed drugs in the agreement. Heptares also could receive as much as $2.5 billion if certain annual sales targets are achieved, and Allergan will commit as much as $50 million to fund research and development.
The pact drove Sosei shares as much as 21 percent higher in Tokyo, putting it on track for its biggest gain in more than three years. Sosei already has partnerships and licensing agreements with companies including AstraZeneca PLC and Novartis AG to develop treatments for conditions from cancer to chronic obstructive pulmonary disease. Tokyo-based Sosei acquired Heptares, a U.K. biotechnology company, last year for as much as $400 million to help diversify revenue and add new potential treatments to its pipeline.
Since the acquisition on Feb. 23 last year, Sosei shares have more than quadrupled.
Star technology
Heptares has an experimental therapy for Alzheimer’s disease in early-stage clinical testing, as well as other compounds for psychosis, migraines, diabetes and attention-deficit hyperactivity disorder. It uses a drug design technology — called StaR — to target GPCR proteins, which are the site of action of about 40 percent of drugs on the market.
Pfizer Inc. (NYSE:PFE), said in November it would purchase $33 million of newly issued Sosei shares, representing about 3 percent of the total Sosei share capital. Pfizer at the time said it would also enter into a drug-discovery collaboration with Heptares to develop new medicines aimed at a handful of biological targets that may play a role in multiple diseases.
See also: Drugmaker tactic to block generics may violate law, FTC says
With little more than 100 employees, Sosei’s surge over the past year has meant it now accounts for some 16 percent of the Tokyo Stock Exchange Mothers Index, a startup share gauge on which it’s listed. It’s helped send the measure to a 12 percent gain in 2016 as of last Friday, almost double what it would’ve been if Sosei weren’t around.
