Takeda, Astellas, and Sumitomo Mitsui Banking Declare Agreement For Early Drug Discovery Program Incubation in Joint Venture

Takeda, Astellas, and Sumitomo Mitsui Banking announced a master agreement on April 22, 2024. This agreement establishes a new joint venture company focused on nurturing early drug discovery programs from Japan to create innovative therapies in mid-2024.

Capital Structure: Tripartite Business Division of Joint Venture

Takeda Pharmaceutical Company Limited (TSE: 4502/NYSE: TAK, President and CEO; Christophe Weber, “Takeda”), Astellas Pharma Inc. (TSE: 4503, President and CEO: Naoki Okamura, “Astellas”), and Sumitomo Mitsui Banking Corporation (President & CEO: Akihiro Fukutome, “SMBC”) have jointly announced the signing of a master agreement which marks the establishment of a new joint venture company aimed at incubating early drug discovery programs. This entity will focus on nurturing early drug discovery programs, mainly sourced from Japan, with the aim of transforming them into innovative therapies.

According to a press release, the new company will initially receive approximately 600 million yen, equivalent to around $3.9 million. Takeda and Astellas will each hold 33.4% of its shares, while Sumitomo will own the remaining 33.2%. It will be helmed by pharmaceutical expert Toshio Fujimoto, the original CEO of iPark Institute, a Takeda offshoot. The yet-to-be-named venture company will be situated at Shohan Health Innovation Park, which iPark oversees and accommodates about 150 firms, including drug startups.

A Collaborative Initiative to Jumpstart Japan’s Bench-to-bedside Process

Japan’s strong position in drug discovery is supported by its top academic institutions and leading pharmaceutical companies, housing many promising early-stage initiatives. However, despite its global leadership, Japan has encountered hurdles in fostering new drugs and startup ventures in recent years. All 3 companies stated that this has been a major challenge in fully harnessing the potential of technologies and “seed assets” originating in Japan.

For instance, a February report from contract research and consulting firm Iqvia revealed a concerning decrease in the number of trials initiated by Japanese companies, dropping from 501 in 2013 to 244 a decade later. Concurrently, Japan’s share of clinical trial starts plummeted from 11% to 4%. Additionally, Iqvia noted that Japan introduced only 20 new medicines in 2023, marking the lowest total since 2014 and trailing behind the U.S. and other major markets. 

In launching the joint venture, Takeda, Astellas, and Sumitomo aim to advance academic research in Japan and tackle the challenges of turning academic discoveries into practical treatments in the transition from bench to bedside, often referred to as the “valley of death”. Essentially, this initiative would seek to streamline the drug discovery process, facilitating progression from novel research through to the formation of drug discovery startups, whilst fully utilizing Japan’s technological potential and numerous primary assets, efficiently translating discoveries into real-world therapies.

Strategic Focus to Accelerate Early-stage Drug Discovery Innovation and Startup Creation in Japan

The joint venture emerged in response to these developmental hurdles in Japan. While specific details were not disclosed, the companies indicated that the venture would encompass “the entire drug discovery process” by nurturing early research in Japan and facilitating the formation of premium startup companies around it. Basically, the initiative intends to kickstart incubation activities by collaborating with academia, pharmaceutical companies, and startups across Japan to facilitate access to potentially transformative early drug discovery programs. As such, the prospective joint venture company is slated to focus on three primary objectives:

1. Advancing innovative drug discovery programs, primarily originating in Japan, into the global pharmaceutical market.
2. Incubating globally competitive drug discovery technology and nurturing entrepreneurship.
3. Unleashing the potential of the drug discovery ecosystem in Japan by establishing high-caliber startup companies.

Additionally, Takeda and Astellas will extend support to the joint venture company, drawing on their expertise gained from global drug discovery research and development. Their aim is to expedite open innovation in early-stage drug discovery and the creation of startup companies for societal benefit. Once all details are finalized, Takeda, Astellas, and Sumitomo anticipate “a swift launch of the new incubation activities,” with the joint venture expected to commence operations in the middle of the year, according to the statement.

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Author

Bernice Lottering