Otsuka Pharmaceutical Co., based in Japan, has reached a definitive merger agreement to acquire the U.S.-based biotech startup Jnana Therapeutics Inc. Under this agreement, Jnana will become a wholly owned subsidiary of Otsuka through its fully owned subsidiary, Otsuka America, Inc. (OAI). The deal, valued at $1.1 billion, is anticipated to close in the third quarter of fiscal 2024, pending the fulfillment of standard closing conditions.
The acquisition agreement stipulates that Otsuka will pay $800 million to Jnana’s shareholders upon completion. Additionally, there is potential for up to $325 million more in milestone payments related to development and regulatory achievements.
Jnana Therapeutics is known for its innovative drug discovery methods, particularly through its RAPID platform. RAPID, which stands for “Rapidly Accelerated Protein Interaction Discovery,” is a next-generation chemoproteomics technology designed to identify drugs for challenging targets that are difficult to address with conventional methods. This platform uses high-throughput, binding-based screening to map binding sites on target proteins and discover small molecules that interact in diverse ways.
Jnana’s approach to drug discovery complements the work of Astex Pharmaceuticals, a subsidiary of Otsuka located in Cambridge, UK. The company focuses on discovering small molecules for targets in autoimmune diseases, such as interferon regulatory factor 3 (IRF3), a key transcription factor involved in producing interferon.
Once the acquisition is finalized, Jnana Therapeutics will operate as a wholly owned subsidiary of Otsuka, with its headquarters in Boston. The acquisition will be executed by merging a special purpose company, created by OAI specifically for this transaction, into Jnana Therapeutics, with Jnana continuing as the surviving entity.
