Takeda To Divest Diabetes Drugs for $1.2 Bn; In $856-M Rare-Disease Pact
As part of ongoing divestment program of non-core assets following its $62-billion acquisition of Shire in 2019, Takeda Pharmaceutical has agreed to sell select non-core diabetes products in Japan to Teijin Pharma, a Tokyo-based pharmaceutical company, for JPY 133.0 billion ($1.2 billion). In a separate deal, Takeda has entered into an agreement, worth up to $856 million ($196 million upfront and $660 million in milestones), to acquire the global rights of soticlestat, a treatment for rare pediatric epilepsies, from Ovid Therapeutics, a New York-based biopharmaceutical company.
Divestment of diabetes drugs to Teijin Pharma
The $1.2-billion divestment agreement with Teijin Pharma includes a transfer of assets, marketing rights, and, eventually, marketing authorization associated with the products in Japan.
The portfolio to be divested to Teijin Pharma is comprised of four products for treating Type 2 diabetes products sold in Japan: (1) Nesina (alogliptin) (2) Liovel (alogliptin/pioglitazone); (3) Inisync (alogliptin/metformin); and Zafatek (trelagliptin). The products generated total sales of approximately JPY 30.8 billion ($288 million) in FY 2019. Takeda will continue to manufacture and supply products to Teijin Pharma.
Takeda says the products are outside of its core business areas: gastroenterology, rare diseases, plasma-derived therapies, oncology, and neuroscience.
These divestments follow Takeda’s $62-billion acquisition of Shire in 2019 and is part of a plan to reduce the company’s debt and improve cash flow by reaching a target of 2x net debt/adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) within FY 2021 to FY 2023. Takeda reports that it has exceeded its initial $10 billion non-core asset divestiture target and has announced 12 deals since January 2019, for a total aggregate value of up to approximately $12.9 billion.
$856-M deal with Ovid Therapeutics
In a separate development, Takeda has entered into an agreement, worth up to $856-million ($196 million upfront and $660 million in milestones), to acquire the global rights of soticlestat, a treatment for rare pediatric epilepsies, from Ovid Therapeutics. The companies had previously formed a collaboration for rare pediatric epilepsies in 2017.
Under the new exclusive agreement, all global rights to soticlestat will go to Takeda. Takeda will assume sole responsibility for further worldwide development and commercialization, and Ovid will no longer have any financial obligation to Takeda under the original collaboration agreement, including for milestone payments or any future development and commercialization costs.
Ovid will receive an upfront payment of $196 million at closing and is eligible to receive up to an additional $660 million upon achieving development, regulatory and sales milestones. In addition, Ovid will receive tiered royalties beginning in the low double-digits and up to 20% on sales of soticlestat, if approved and commercialized. The new agreement is expected to close by the end of March 2021, subject to the satisfaction of customary closing conditions, including review by the appropriate regulatory agencies under the Hart-Scott-Rodino Act.
The companies first formed an agreement in 2017, under which Takeda received equity in Ovid and was eligible to receive up to $85 million in payments for regulatory milestones, including the initiation of Phase III clinical trials. Ovid led global development of soticlestat through the successful demonstration of proof-of-concept in multiple rare epilepsies.
Soticlestat is a cholesterol 24-hydroxylase (CH24H) inhibitor for treating developmental and epileptic encephalopathies, including Dravet syndrome and Lennox-Gastaut syndrome.