Otsuka’s Taiho Pharmaceutical is paying $400 million upfront to acquire Switzerland’s Araris Biotech and its antibody-drug conjugate (ADC) linker platform.
The two companies have been working together since November 2023, when Araris agreed to use its AraLinQ platform to develop ADCs aimed at Taiho’s targets of choice. Taiho presumably liked what it saw, as the biotech has now decided to go all-in and buy Araris.
The deal will see Taiho hand over $400 million, with Araris’ shareholders potentially in line for a further $740 million in milestone payments, according to a March 17 release.
Araris has its origins in Switzerland’s Paul-Scherrer-Institute, before spinning off in 2019. The biotech is focused on designing ADCs that have greater linker solubility, with three preclinical therapies aimed at hematological and solid tumors expected to enter human trials over the course of 2025 and 2026.
Araris touts its linker tech as having three benefits over its competitors. Firstly, the attachment site on a specific amino acid within the antibody IgG-Fc framework means the antibody maintains almost the same performance when part of the ADC.
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Meanwhile, the strong peptide bond connecting the linker antibody to the therapy’s payload results in “exceptional stability in the blood stream and therefore, avoidance of healthy tissue damage,” according to the release. This bond then breaks easily inside a cancer cell.
“Araris’ unique ADC technology represents a quantum leap for the ADC field, potentially offering precise payload delivery of multiple mechanisms of action simultaneously to the tumor, with less toxicity,” CEO and co-founder Dragan Grabulovski said. “We are proud to combine with Taiho, our partner since November 2023, whose significant cancer expertise will support us in turbo-charging the clinical development of our potent ADC candidates in hematological and solid tumors.”
Taiho is a subsidiary of Japan’s Otsuka and markets a wide range of anticancer drugs in the country. In the U.S., the subsidiary has three FDA-approved products: the colorectal treatment Lonsurf, the bile duct cancer med Lytgobi and the myelodysplastic syndromes treatment Inqovi.
Using Araris’ ADC drug tech alongside Taiho’s own small-molecule drug discovery platform Cysteinomix will allow Taiho to “further expand its ongoing development portfolio in the field of oncology,” according to this morning’s release.
ADCs have been one of the hottest spaces for dealmaking in recent years, with the likes of AstraZeneca, Roche, Merck & Co. and Ipsen all posting billion-dollar-plus biobucks pacts.
mergers and acquisitions antibody-drug conjugates Otsuka Pharmaceutical Taiho Pharmaceutical Deals Biotech