Sosei acquires UK biotech Heptares for $400 million

Japan’s Sosei has acquired biotech company Heptares in a deal which it says will create a major drug discovery and development hub in the UK.

Sosei has made its name in developing two new COPD treatments in collaboration with Novartis, Seebri and Ultibro. The drugs have now been approved in Japan and Europe, and are expected to reach the US market later this year.

The company says it has been looking at ways of expanding beyond this successful collaboration, and says it acquired Heptares because of an ‘exciting’ clinical and pre-clinical pipeline including molecules for Alzheimer’s, ADHD, metabolic disease, migraine and others.

Key to the promise of Heptares is its StaR technology platform, that enables it to design drugs precisely based on a detailed understanding of the structure of the drug target – an approach known as structure-based drug design (SBDD).

Heptares says this method allows it to design and develop superior medicines that are more effective, with better selectivity and fewer side effects.

The UK company, based in Welwyn Garden City in Hertfordshire near London already has a revenue stream from partnerships with major pharma companies wanting to tap its drug discovery and design expertise. These companies include AstraZeneca, Cubist (Merck), Takeda, MorphoSys, MedImmune and Novartis, partnerships which have provided more than $30 million in milestone payments and royalties.

Sosei has acquired 100 per cent of Heptares’ share capital for $180 million in cash consideration and up to $220 million depending on the progress of the company’s pipeline and platform.

The newly enlarged Sosei group will continue to be led by Shinichi Tamura as chairman and CEO. Dr Malcolm Weir, Heptares co-founder and chief executive, will remain as head of Heptares, which will be managed as an autonomous unit within the company. Dr Weir will also join the enlarged group as chief R&D officer and will be responsible for worldwide research and development outside Japan.

Shinichi Tamura, chairman and chief executive of Sosei said: “Today is an historic day for Sosei. Heptares is based on truly world-class science and its drug discovery and development capabilities will contribute to a sustainable stream of new products for the Group. While core to our future, an independent subsidiary structure will ensure Heptares is able to maintain the culture and business model that has been the foundation of its success so far.”

Heptares is one of many UK biotech companies which have been spun out from academic centres. Its acquisition by an overseas company means the dream that it could grow to become a new UK biotech champion has been dashed, but the merger will help it accelerate R&D investment, and its promised independence within Sosei is good news for Heptares’ scientists.

The company was founded in 2007 based on pioneering science led by Richard Henderson and Christopher Tate at the MRC Laboratory of Molecular Biology (Cambridge, UK), with investment from MVM Life Science Partners and led by co-founders Malcolm Weir and Fiona Marshall.

Dr Malcolm Weir, chief executive of Heptares, added: “This is an excellent next step for Heptares which maintains our integrity and purpose within a Group that has a clear and coherent vision. It is a great example of the translation of ground-breaking UK academic science into economic and potential therapeutic value and secures significant investment into our technology platform and clinical pipeline well into the future. We look forward to working within the Group to advance our programmes, both partnered and in-house, and, over time, to providing much needed new treatment options for patients.”

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