Takeda America Holdings to acquire Envoy

OSAKA, Japan—Takeda Pharmaceutical Co. Ltd. and EnvoyTherapeutics Inc. have jointly announced that Takeda America Holdings, Inc.,Takeda's wholly owned subsidiary, has entered into a definitive agreement withEnvoy under which Takeda America Holdings will acquire Envoy. The transaction,which is expected to be finalized in the next few days, will result in theacquisition of 100 percent of the equity in Envoy for a total consideration ofup to $140 million, which includes an upfront payment as well as progress-dependent,preclinical milestone payments.

The transaction is not the first interaction between the companies. In Oct. 2009,Takeda Ventures, Inc., the corporate venture arm of Takeda, participated inEnvoy's Series A financing round, which gained Takeda approximately 12.5percent ownership in Envoy. In addition, the companies also established aresearch collaboration in Oct. 2010, and their research into schizophreniabegan in November of the same year.

"Since our initial investment in 2009, it has been clear tous that Envoy's scientific excellence in combination with their vision for theutilization of bacTRAP technology have great potential to create and exploretruly innovative targets across multiple therapeutic areas," Dr. Paul Chapman,general manager of Pharmaceutical Research Division at Takeda, said in a pressrelease regarding the deal. "Together with Envoy, we will continue our effortsto contribute to the health of patients worldwide by delivering innovativedrugs."

Envoy is a privately held drug discovery company based inJupiter, Fla., that aims to discover new drugs that offer increased efficacyand fewer side effects than existing therapies, primarily through itsproprietary bacTRAP technology. bacTRAP unites genetic engineering andmolecular biology techniques for labeling and extracting the protein-makingcomponents of certain types of cells, and has particularly viability in thearea of the central nervous system. The acquisition gains Takeda this promisingtechnology, along with associated know-how, materials, datasets and analysistechniques. Takeda also gains access to Envoy's preclinical central nervoussystem assets, which include programs from Parkinson's disease and cognitiveimpairment associated with schizophrenia.

"Takeda's expertise in so many disease areas, coupled withits strong commitment to innovation in drug discovery, will enable thewidespread application of Envoy's bacTRAP technology," Brad Margus, CEO anddirector of Envoy, said in a statement. "Our scientists are thrilled by the opportunityto deploy bacTRAP's unique capabilities across numerous new therapeutic areas."

Takeda intends to continue maintain Envoy's operations inJupiter through March of next year, after which the majority of Envoy'sscientific staff and management team will be transferred to Takeda Californiain San Diego as part of the Takeda Pharmaceuticals Research Division. Envoycurrently has 21 employees.

Takeda brought on Ernst & Young as its financial advisorfor the transaction, with Cooley, LLC serving as its legal counsel. Envoybrought on Grant Thornton, LLP as its financial advisor, and Latham andWatkins, LLP as its legal advisor. Given that financial impact from theacquisition on Takeda's fiscal 2012 statements is expected to be limited, thecompany has noted that it does not find it necessary to adjust its financialforecasts at present.

SOURCE: Takeda press release