Japanese Big Pharma Takeda and VC Lightstone have come together to launch Cerevance, a new company focused on neuroscience R&D for neurological and psychiatric disorders that will get the help of U.K. scientists and be headed up by Brad Margus.
Cerevance begins life with a $36 million Series A round, with $21.5 million of that pot coming out of the investment from Takeda and Lightstone.
Its R&D will be centered on new tech coming out of the Howard Hughes Medical Institute laboratory of Nathaniel Heintz at the Rockefeller University.
Takeda said in a statement that it will “jumpstart the new company” by providing a 25-person neuroscience research team from its Cambridge, U.K., site, which includes industry vet Mark Carlton, the longtime president and CSO of Takeda Cambridge.
“We are thrilled to assemble some of our best scientists, programs and discovery resources in a highly focused endeavor as part of our increased emphasis on leveraging external innovation,” said Andrew Plump, chief medical and scientific officer of Takeda.
“When we announced the closure of our research site in Cambridge, U.K., our goal was to find an innovative externalization home for our most promising CNS programs and scientists in an entrepreneurial setting. Cerevance is a great example of our new R&D strategy.”
This facility will come with a fully equipped lab space, and licenses to a host of preclinical and clinical stage drug programs. It will have sites both in the U.K. and Massachusetts.
Brad Margus, who has served as CEO of Genome Bridge and co-founded Envoy Therapeutics as well as a number of other biotechs, becomes the startup’s new CEO.
He said: “Seven of the ten leading causes of disability in the world are central nervous system disorders. With a well-capitalized, proven team and promising drug programs already underway, we hope to rapidly advance a pipeline of therapeutics into the clinic in parallel with scaling up a truly novel approach to brain diseases based on our new technology.”
The companies point out that this is not the first time that Takeda, Heintz and Margus have joined forces as back in 2009, Takeda invested in and later work with CNS drug discovery start-up Envoy Therapeutics—a project that included Heintz and Margus as founder, and which also licensed a technology from the Rockefeller University. Takeda ultimately acquired Envoy in 2012.
A couple of months back, Takeda announced a major shake-up of its clinical and drug development as it began to move hundreds of its staff over to PRA Health with the CRO set to take over control of much of its operations in the U.S. and Europe. It’s been cutting back in the U.K. for some time now amid a broader worry from Japanese co's in what Brexit will bring to the country, and it's entrance into Europe.
In mid-September, a few days after the PRA deal, and according to reports from the Financial Times, Takeda was also said to have built up a $15 billion M&A war chest to use for U.S. acquisitions.
This comes during a major shift in its R&D philosophy, which has seen it drop some programs and buy in more deeply into others as it wants to run first-in-class GI, oncology, vaccines and CNS projects.
Back in July, Plump said the company’s goal was to “become the best R&D organization in our industry,” but said that in order to do this, it needs to “first build new capabilities and embrace new ways of working.”
This includes trimming back across some research areas, i.e., those outside of the four-core focus, as well as doubling down its geographic efforts on its native Japan and the U.S., two of the world’s biggest pharma markets.
Takeda has struggled with profitability in recent years, with its last major deal going back to 2011 when it shelled out nearly $14 billion for Swiss biotech Nycomed.
Takeda is also under pressure from a looming loss of its U.S. patent on its top-selling blood cancer drug Velcade (bortezomib), with further losses expected after 2020 from a host of other meds.