Staff Writer

The attraction of Japanese pharmaceutical companies for biotech continued Wednesday with the announcement that Daiichi Sankyo Co. Ltd. is buying privately held U3 Pharma AG, a German biotechnology company, for $235 million.

Tokyo-based Daiichi Sankyo will purchase 100 percent of the stock and make a one-time payment of €150 million (US$235 million dollars) for U3, of Martinsried, Germany. The closing of the deal is subject to clearance under U.S. antitrust law and other conditions.

The acquisition complements Daiichi Sankyo's oncology portfolio, which includes three monoclonal antibodies in development. With the purchase it gets antibody treatments in breast, colon and lung cancers that are either in the clinic or will be soon.

Daiichi Sankyo's oncologic agent to combat malignant neoplasms (CS-1008) is in Phase II.

Daiichi Sankyo, Japan's third largest pharmaceutical company, has commercial rights in Japan to market denosumab (AMG 162), which is licensed from Amgen Inc., of Thousand Oaks, Calif. In Japan the agent is currently in preparation for Phase III testing for osteoporosis, and in Phase III for bone metastases in patients with advanced breast cancer.

In addition, Daiichi Sankyo has the exclusive rights in Japan to develop and market nimotuzumab (DE 766) - an oncologic agent in Phase I to treat advanced solid malignancies - which is licensed from CIMYM Biosciences.

All those antibodies are in more advanced phases of development than U3 Pharma's lead compound (U3-1287, AMG-888), Daiichi Sankyo spokesman Rich Salem told BioWorld Today. That compound, which is being co-developed with Amgen, currently is in the preclinical phase, and Daiichi Sankyo plans to move it into the clinic this year.

U3-1287 is the first fully human anti-HER3 monoclonal antibody (mAb) to inhibit oncogenic signaling and tumor proliferation, according to Daiichi Sankyo.

In March, Daiichi Sankyo said it was expanding its joint venture with another German company, MorphoSys AG, for its advanced human combinatorial antibody library and its phage display technologies.

Takashi Shoda, president and CEO of Daiichi Sankyo, said in a statement, "One of our goals for Daiichi Sankyo is to increase our presence in novel therapeutics in the oncology arena."

U3 Pharma founder Axel Ullrich, of the Max Planck Institute of Biochemistry, is credited with pioneering gene technology-based and oncology-focused research that led to the development of the oncology blockbusters Herceptin by Genentech Inc. of South San Francisco and Sutent by Pfizer Inc., of New York.

U3 Pharma was established in 2001 and currently employs 27 people, the majority of whom work directly in research and development.

The news adds to a growing list of Japanese pharmaceutical companies that have acquired biotech companies and products. In April, Tokyo-based Astellas Pharma Inc. announced a partnership with South San Francisco-based CoMentis Inc. to develop a compound for Alzheimer's disease in a deal that could bring in $760 million for CoMentis. In February, Takeda Pharmaceutical Co. Ltd. and Amgen formed an alliance, in which Takeda gained licensing rights to 13 product candidates for a total consideration that potentially exceeds $1.1 billion, plus royalties. Osaka, Japan-based Takeda also has signed a $270 million worldwide licensing deal with South San Francisco-based Cell Genesys Inc. for its GVAX prostate cancer vaccine and plans to acquire Cambridge, Mass.-based Millennium Pharmaceuticals Inc., including its multiple myeloma drug Velcade, for $8.8 billion.

Shares in Daiichi Sankyo (STUTTGART:D4S) were down 26 cents Wednesday, closing at $17.20.