Otsuka Pharmaceutical Acquires Jnana Therapeutics Inc.

Otsuka Pharmaceutical Co., Ltd. and Jnana Therapeutics Inc. have announced a definitive merger agreement under which Otsuka will acquire Jnana, making it a wholly owned subsidiary through Otsuka America, Inc. (OAI). Expected to finalize in the third quarter of fiscal 2024, the acquisition hinges on customary closing conditions. As stipulated, Otsuka will pay USD $800 million to Jnana's shareholders upon completion, with an additional USD $325 million contingent on achieving development and regulatory milestones.

The acquisition aims to leverage Jnana's innovative drug discovery approach, particularly its RAPID chemoproteomics platform. This platform excels in identifying medicines for targets that are highly validated yet challenging to drug. RAPID employs a high-throughput, binding-based screening method that allows for the discovery of binding sites across a target protein's surface, leading to the identification of small molecules with diverse pharmacologies. Jnana has notably succeeded in using RAPID to identify first-in-class compounds for various difficult-to-drug target classes like solute carriers, transcription factors, and signaling scaffold proteins. Their work complements the drug discovery efforts of Astex Pharmaceuticals, another subsidiary of Otsuka.

One of Jnana's key focuses is Phenylketonuria (PKU), a rare metabolic disorder characterized by high levels of phenylalanine in the blood. Jnana has developed JNT-517, an allosteric small molecule inhibitor of SLC6A19, a solute carrier involved in amino acid reabsorption in the kidney. JNT-517 has demonstrated efficacy, safety, and tolerability in a Phase 1b/2 study and holds promise as a first-in-class oral treatment for PKU, addressing the needs of patients across a spectrum of disease severities.

In addition to PKU, Jnana is also exploring small molecule drug discovery in the autoimmune disease space, targeting highly validated but difficult-to-drug targets like interferon regulatory factor 3 (IRF3), which is crucial for interferon production.

Otsuka has a history of contributions to treating rare diseases, particularly in the renal domain with products like JINARC for autosomal dominant polycystic kidney disease, sibeprenlimab for IgA nephropathy, and voclosporin for lupus nephritis. The company has also expanded into autoimmune research through its acquisition of Visterra, which specializes in antibody drug technology and drug discovery platforms.

Makoto Inoue, President and Representative Director of Otsuka Pharmaceutical, expressed satisfaction with the merger, emphasizing that integrating Jnana's technologies and pipeline would bolster Otsuka's R&D efforts, particularly in the Boston area, a significant biotech hub. He highlighted the potential synergistic effects on Otsuka's global expansion.

Joanne Kotz, Ph.D., CEO and co-founder of Jnana, noted that the transaction acknowledges Jnana's achievements, including the creation of the RAPID platform and the development of JNT-517. She expressed enthusiasm about joining Otsuka and advancing JNT-517 into a registrational study by 2025, along with continuing the progression of Jnana's pipeline of innovative oral medicines for autoimmune diseases.

Upon completion, Jnana will become a wholly owned subsidiary of Otsuka and continue its R&D operations. The acquisition will involve merging a special purpose company established under OAI for this transaction into Jnana, which will remain the surviving entity. Jnana's existing shareholders will receive cash in return. The Boards of Directors of both companies have approved the acquisition, but it remains subject to Jnana's shareholder approval and U.S. antitrust law conditions. The acquisition is targeted for completion in the third quarter of 2024.

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