Takeda in $35M PvP Biologics GI pact, with acquisition in the cards

Takeda has been no stranger to biotech deals over the past 12 months (notably ones involving GI meds), and the Japanese pharma has started 2017 in the same vein, inking a deal with U.S. biotech PvP Biologics for its celiac disease med, with an option attached to buy the company.

The Osaka-based Big Pharma, which has recently retooled its R&D with the shutting down of some research ops and a greater focus on cancer, GI, CNS and vaccines, has been looking outward in 2016.

This includes deals for tiny California biotech Altos Therapeutics and its GI drug, also coming with a sweetened buyout deal in the cards, and a deal with TiGenix, as well as its tie-up with VC Lightstone that sees the two launch Cerevance, a new company focused on neuroscience R&D for neurological and psychiatric disorders.

Now, in 2017, this looks to be a continuing strategy as it has today struck a similar deal as that with Altos that sees it pay $35 million upfront to the San Diego and Seattle-based biotech, which PvP will use toward its R&D through phase 1 proof-of-principle studies; should this all go according to plan, Takeda could pay to buy the biotech, although it’s keeping quiet on what it would pay for the privilege.

The phase 1 trial will center on KumaMax, which is currently preclinical and works as an enzyme that breaks down the immune-reactive parts of gluten in the stomach. It is designed to avoid the painful symptoms and damage done in the small intestine from accidental gluten ingestion.

Currently, the only treatment available for celiac disease patients is a strict gluten-free diet. PvP said in a statement that KumaMax “has the potential to degrade the immune-reactive parts of gluten before they exit the stomach in order to decrease an immune response and reduce the symptoms and intestinal damage associated with celiac disease.”

This comes as Takeda was reported last year by the Financial Times to have a $15 billion M&A war chest, notably with a focus on buying U.S. companies.

A couple of months back, Takeda also announced another step in its ongoing and major shake-up of its clinical and drug development as it began to move hundreds of its staff over to the contract research organization PRA Health, with the CRO set to take over control of much of its operations in the U.S. and Europe.

Asit Parikh, head of the gastroenterology therapeutic area for Takeda, told FierceBiotech that for its PvP deal, neither Takeda nor PRA will be involved on the research side as it remains for now PvP’s baby up to the end of phase 1.

On the CRO deal, he said: “Takeda’s strategic partnership with PRA is progressing nicely, with the relationship officially beginning when we announced the partnership in September 2016.”

He said that, given the spate of deals in recent months, GI is still “one of the core therapeutic areas for Takeda, along with oncology, CNS and vaccines.”

He added: “GI will continue to be a key driver in Takeda’s portfolio and on-market product offerings. Takeda’s GI therapeutic area will play a significant role helping the organization achieve its R&D strategy: to be patient-centric and science-driven through focused, core therapeutic areas, optimizing the pipeline, enhancing the capabilities and transforming the culture.”

I asked Adam Simpson, president and CEO of PvP biologics, how this deal, which is a major one for the biotech, came about.

“Tachi Yamada, now chairman of PvP Biologics (who knew of PvP/its co-founders Ingrid Swanson Pultz/David Baker due to his role as chairman of the SAB at the Institute for Protein Design at UW), came up with the idea to go straight to pharma to finance the company in exchange for pharma having a right to opt in to acquire the asset.

“PvP (directly, or through its advisers/Tachi) reached out to a select list of logical potential partners (Tachi was of course very familiar with Takeda and its GI and externalization focus); PvP’s management team/advisers ultimately negotiated and executed the transaction with Takeda.”

He said that KumaMax is “unique in that it is active under acidic stomach conditions and has high specificity for the parts of gluten that cause the autoimmune reaction leading to celiac disease.”

But neither exec would be pushed on timelines for this entering the clinic: “Clinical trials are being planned,” Simpson said; “however, Takeda and PvP are not disclosing specifics at this time.”