Seeking global deals, Taiho swells its U.S.-based VC fund to $300M

Seeking further returns from Taiho Ventures, Taiho Pharma just decided to multiply the VC’s investment pool sixfold to $300 million, adding to the already-plentiful supply of cash for early-stage biotechs.

California-based Taiho Ventures was set up with a $50 million fund in 2016 with the aim of backing biotech startups involved in leading-edge cancer research that could develop into pipeline-boosting strategic alliances. Two years on—with a portfolio that includes Arcus Biosciences, PACT Pharma, Harpoon Therapeutics, Storm Therapeutics, ORIC Pharmaceuticals and Quentis Therapeutics—the fund is looking to extend its reach and, while still focused primarily on cancer, may look at opportunities in other areas.

The investments made to date have already started to add to Taiho Pharma’s pipeline, but the drugmaker says it wants to step up its pursuit of international deals that will help it meet its goal of becoming a “global” oncology company. So far, its efforts have resulted most notably in a $130 million licensing deal—agreed on in July—for Japanese and certain other Asian rights to AB928, billed as a first-in-class dual adenosine receptor antagonist in development as a cancer immunotherapy.

AB928 is an oral small molecule that inhibits adenosine 2a and 2b receptors, which are thought to be involved in suppressing immune responses in the tumor microenvironment. It is currently in early-stage clinical development for triple-negative breast cancer and ovarian cancer, in combination with Arcus’ anti-PD-1 antibody AB122 and with chemotherapy.

Taiho Pharma President Masayuki Kobayashi said that while in-house drug discovery at its facilities in Japan will continue to be the “mainstay” of its R&D, the company “will also continue to access groundbreaking innovation, primarily in the oncology field, through Taiho Ventures, in an effort to further strengthen its drug discovery capabilities.”