Takeda Picks Up Millennium

Apr 15, 2008

Last week, Takeda broke the news that it would acquire biotech drug company Millennium Pharmaceuticals for $8.8 billion?a whopping 53 percent premium to the company's market capitalization the day before the deal was announced. This deal secures Takeda as a player in oncology, and boosts Japanese presence in the US drug market.

Shares in Millennium promptly shot up nearly the deal range, while Takeda shares dropped more than two percent amid fears that the Japanese company had overpaid for the $500 million-a-year manufacturer.

"Strategically, this deal is about joined forces and resources to achieve leadership in oncology, and the intent of Takeda is to use Millennium to achieve a leadership position in oncology," said Anna Protopapas, senior vice president of corporate development at Millennium. "In addition, we have a franchise that allows us to leverage the global reach that Takeda has, and bring the drugs to a wider group of patients."

Going forward, Millennium will be a stand-alone unit, operating as an independent part of Takeda, and driving the company's oncology business. The entire management team of Millennium has agreed to stay on; CEO Deborah Dunsire will continue to run the company, reporting directly to Takeda President Yasuchika Hasegawa.

Key Treatments
The main drug Millennium brings to the table is Velcade, a proteasome inhibitor approved as a second- and third-line treatment for multiple myeloma and mantle cell lymphoma. The treatment also received positive data in trials as a front-line multiple treatment for myeloma.

On the market since 2003, Velcade is one of the two main treatments available for this disease, and is forecast to bring in $365 million this year in US sales.

While Millennium is focused on oncology, the company also has two drugs for inflammatory bowel disease. One will enter phase III trials later this year; the other drug is in development.

"Millennium is a pioneer in the field of protein homeostasis research," a Takeda spokesperson told Pharm Exec on Monday. "On the other hand, Takeda's oncology research is focused on hormone-related drugs and kinase inhibitors, for which it has built up a promising pipeline of products in development. With these two complementary strengths, we think there is an excellent fit between Millennium and Takeda`s research activities."

Genomic Roots
Millennium, a 15-year-old operation, was one of the first genomics companies. Its original vision was to sequence the human genome, and use biological data gained from studying the human genome to develop novel therapies. The company quickly moved downstream to drug discovery and development.

With the launch of Velcade in 2003, Millennium made the leap into commercialization. The company currently has 10 drugs in the pipeline for cancer and GI, according to a spokesperson. Millennium it had a previous offer to buy several years ago that was turned down.

Japan Heads West
The Millennium deal is further proof for analysts that Japanese drug manufacturers are expanding into the West. This is the second time in the last four months that a US company was bought by a Japanese pharma. In January, Eisai completed its $3.9 billion acquisition of MGI Pharma.

"Japanese companies are taking advantage of the weak US currency, and strategically they seem to have an interest in expanding to the United States," said Howard Liang, managing director of technology at Leerink Swann Research. "This is clearly a strategic transaction for Takeda, and it's not just a short-term financial goal that they are trying to achieve. They want to build a US presence in the oncology business."