Takeda has put together a €520 million ($627 million) all-cash deal to acquire TiGenix. The takeover will give Takeda full control of Cx601, a stem cell therapy that is closing in on a European approval in Crohn’s disease.
Japan’s Takeda picked up the ex-U.S. rights to Cx601 for €25 million upfront in 2016. Last month, the EMA’s drug review group recommended the allogeneic expanded adipose-derived stem cell therapy for approval in the treatment of complex perianal fistulas in Crohn’s disease patients. That milestone appears to have prompted Takeda to make its move.
Takeda has received the backing of TiGenix’s board for a €1.78-a-share takeover. That would see the Japanese company pay €520 million to make TiGenix its subsidiary.
The buyout represents an 82% premium over TiGenix’s closing price prior to news of the deal broke. Investors who came on board over the past five years—when TiGenix’s share price struggled to stay above €1—will therefore turn a tidy profit. TiGenix traded significantly above €1.78 in the years immediately after its 2008 IPO but has languished well below that level for most of its time on public markets.
In return for its outlay, Takeda gains control of a drug that is set to receive approval in Europe in the first half of this year. Beyond that, Takeda has its sights on the completion of a phase 3 trial TiGenix initiated to support an approval in the U.S. And on the work it will need to undertake to bring the cell therapy to patients in Japan, Canada and emerging markets.
Takeda thinks the drug can address the needs of patients failed by existing therapies. In the phase 3 run to support the European regulatory filing, TiGenix enrolled 289 Crohn’s disease patients who had been failed by existing drugs, primarily anti-TNF drugs such as Johnson & Johnson’s Remicade. Half of participants in the Cx601 cohort went into remission, compared to about one-third of people in the placebo group.
The buy-in of TiGenix’s board suggests money matters are unlikely to scuttle the deal. But Takeda has given itself a way to back out of the takeover if the safety or regulatory situation changes. The deal will only go ahead if European regulators approve Cx601 and there is an “absence of a material adverse effect occurring at any time after the date of this announcement.”