Sosei acquires Heptares for $400 million

LEADING Japanese biopharmaceutical company Sosei Group Corporation (TOKYO:4565) has recently acquired Heptares Therapeutics Limited, a clinical-stage private UK-based biotechnology company dedicated to creating novel medicines targeting G protein-coupled receptors (“GPCRs”).

 

Sosei, which has operations in Japan and the UK, purchased 100% of Heptares’s share capital for $180 million in cash consideration and up to $220 million contingent upon the successful progression of the company’s pipeline and platform.

 

Heptares will become a wholly owned subsidiary of the Group, with its existing R&D operations continuing in the UK. This will create a leading global biopharmaceutical group with sustainable, proven, and highly successful drug discovery and clinical development capabilities for generating innovative medicines and a broad and balanced pipeline with strong growth prospects, including products with huge potential. In addition to a significant cash balance, the combined companies will have access to global pharmaceutical markets and regulatory expertise across the EU, US, and Japan.

 

The acquisition will enable the Sosei Group to sustain its pipeline and revenue stream on a long-term basis, and is  a major step towards the Group’s strategic vision of becoming a significant global biopharmaceutical company from Japan. 

 

Heptares, which leverages a clinical and preclinical pipeline of potentially transformative new medicines targeting serious diseases with major unmet need such as Alzheimer’s, ADHD, schizophrenia, and migraine, and its unique, differentiated, and high potential StaR® drug discovery platform, meets the Group’s objective of building on and going beyond the secured revenue stream in milestones and royalties derived from its two COPD products, the Ultibro® Breezhaler and Seebri® Breezhaler, marketed by its partner Novartis. 

 

Further, Heptares’s prospective stream of revenue through milestones and royalties from established collaborative partnerships with a number of the world’s leading pharmaceutical companies will make a significant contribution to the Group’s financial position. Revenues from new clinical-stage alliances and platform partnerships for the combined entity will drive continued strong growth.

 

Heptares will be managed as an autonomous subsidiary of the Group. Its co-founder and CEO Dr. Malcolm Weir will remain as CEO of Heptares. He will also join the enlarged Group as chief R&D officer and will be responsible for worldwide research and development outside Japan. 

 

Meanwhile, Shinichi Tamura will continue to lead the Group as chairman and CEO. Dr. Declan Doogan and Peter Bains, who current serve as non-executive directors on the Group’s main Board, will join the Heptares Board representing the Group’s interest. Dr Fiona Marshall, co-founder of Heptares and CSO, will also join the Heptares Board.

 

Sosei was advised by Moelis & Company and Clifford Chance LLP. Heptares was advised by Goldman Sachs International and Covington & Burling LLP.