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Dive Brief:
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Otsuka Pharmaceutical plans to buy Jnana Therapeutics for $800 million in cash, gaining access to the privately held biotech’s drug discovery platform and an experimental medicine that’s already demonstrated proof of concept in an early clinical study.
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Jnana’s core technology is designed to improve the science of “chemoproteomics,” or figuring out how proteins interact with small molecules. The company has so far focused on autoimmune diseases and a rare metabolic condition called phenylketonuria, or PKU. Its lead drug, JNT-517, showed promise in an early-stage study of PKU patients.
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The deal with Otsuka includes the potential for as much as $325 million in additional payments to Jnana shareholders for reaching certain developmental and regulatory goals, the companies said Thursday. They expect the acquisition to close in the third quarter.
Dive Insight:
Jnana is the type of mature biotech that might have been planning an initial public offering in a different market atmosphere. Its co-founders include the prolific Harvard chemist Stuart Schreiber and its roster of investors runs the gamut from Bain Capital to Pfizer. Jnana also has two drug development partnerships with the Swiss drugmaker Roche, and a medicine that’s already displayed potential in a clinical trial.
But with IPOs remaining difficult for many drug startups to pull off, more and more companies like Jnana are being snapped up by larger pharmaceutical makers. Acquisitions of private biotechs are currently on their fastest pace in years. Data compiled by BioPharma Dive show that 16 of the 29 buyouts worth at least $50 million in upfront value this year have involved privately held developers. Three have occurred since July 22 and a fourth, from Boehringer Ingelheim, could be worth $1.3 billion, though upfront consideration wasn’t disclosed.
Otsuka is focused on promising signs that Jnana may succeed in developing oral treatments for areas where small-molecule drug discovery has been “challenging.” In the case of PKU, the company may also be addressing a significant unmet need if future trials validate JNT-517’s effects. A majority of patients with the condition aren’t effectively treated with existing therapies, according to the companies.
PKU has caught the eye of a number of drugmakers over the years. Just this week, PTC Therapeutics announced the submission of an application to the Food and Drug Administration for its experimental PKU treatment, called sepiapterin.