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Sharing the wealth
THOUSAND OAKS, Calif.—In an effort to speed molecules in its pipeline toward commercialization in Japan, Amgen is forging a partnership with Takeda Pharmaceuticals Co. Ltd. It's a deal that could net Amgen up to $1.18 billion, plus royalties and development funding.
According to terms of the deal, Takeda will develop and commercialize for the Japanese market up to 13 molecules from Amgen's pipeline, one of which is included as an option.
The collaboration will enable Takeda to expand its pipeline with Amgen's antibody drugs for cancer, inflammation and pain and will likely help it catch up with rivals in boosting its biopharmaceutical business.
Anne McNickle, a media relations specialist with Amgen, says the deal makes sense because the company has "an embarrassment of riches" in its pipeline with too many experimental compounds to develop on its own. She says the agreement will aid with getting those drugs to patients in the Japanese market.
"Japan is a very important market, especially because of its unique regulatory requirements," says McNickle. "We have a history of partnerships in Japan and we know the value of a partnership there."
A drug typically becomes available in Japan four years after its U.S. release because of additional testing requirements.
McNickle says Takeda will acquire all the shares of Amgen's Japanese subsidiary, Amgen KK. Financial terms for the entire deal include an upfront cash payment to Amgen of $200 million. Takeda also will pay Amgen up to $340 million in expected worldwide development costs over the next several years, $362 million in success-based milestone payments and double-digit royalties on sales in Japan.
"We will be using [money from] the deal to help us further our pipeline globally," says McNickle. "We will use this to advance the pipeline for all patients."
McNickle adds partnership includes Amgen's Vectibix (panitumumab), motesanib diphosphate and additional molecules in oncology, inflammation and neurology/pain. With the exception of oncology candidate motesanib diphosphate, all molecules included in the partnership are biologics. Amgen retains certain co-promotion rights in Japan on all programs.
Takeda also will become Amgen's worldwide partner for motesanib diphosphate (AMG 706), and will pay Amgen $100 million upfront, $175 million in success-based milestones for the first two indications, and double digit royalties on sales in Japan. Takeda will also pay 60 percent of ongoing clinical development expenses outside Japan and share potential profits outside Japan 50/50.
According to Amgen Chairman and CEO Kevin Sharer, the development programs included in this collaboration represent the growth engine for Amgen in the next decade.
"Takeda's confidence in these programs validates their potential to become innovative therapies for patients in Japan and worldwide," says Sharer.
Takeda, however, is not getting the Japanese rights to what is widely considered Amgen's most promising experimental product — the osteoporosis drug denosumab. Those rights were sold to Takeda's rival, Daiichi Sankyo, last summer.
Analysts are offering differing opinions on the impact of Amgen's deal with Takeda.
Lehman Brothers analyst Jim Birchenough said the sale helps prove that there is value in Amgen's slate of drug candidates, and also helps it achieve its goal of simplifying its pipeline.
"With attractive upfront and milestone payments, research and development funding and future Japanese royalties we view the deal favorably as a vehicle to streamline Amgen's cost structure, optimize pipeline development and broaden ex-U.S. reach," he said.
Christopher Raymond, an analyst with Robert W. Baird & Co., was less than enthusiastic in his review of the deal.
"For a younger, less established firm this might represent a nice validation of the compounds, but you would think Amgen would be beyond that," Raymond says. ddn