Taiho acquires Swiss biotech and ADC technology for $400M

Japan-based Taiho Pharmaceutical announced plans to acquire Araris Biotech, a company from Switzerland, for an upfront sum of $400 million. Araris specializes in antibody-drug conjugate (ADC) technology. The collaboration between the two firms began in 2023 and involved utilizing Araris's technology to develop novel drug candidates targeting specific areas identified by Taiho. The acquisition is anticipated to be finalized within the first half of this year, with potential additional payments to Araris that could reach up to $740 million, contingent on meeting certain milestones.

ADCs are a cutting-edge approach in cancer treatment, combining toxins that kill tumors with targeting molecules linked through advanced technology. Recent advancements in linking methods have enhanced the efficacy of ADCs, leading to the development of new treatments and attracting significant investment in the field. Several major pharmaceutical companies, such as AstraZeneca, Pfizer, and Merck & Co., have entered into substantial agreements to expand their portfolios with ADCs. AstraZeneca, in partnership with Daiichi Sankyo, has experienced notable success with their ADC therapies, Enhertu and Datroway.

Araris Biotech, which originated from the Paul Scherrer Institute six years ago, has received funding from 4BIO Capital in 2020 and 2022. The company promotes its proprietary AraLinQ technology, claiming it can produce more stable and powerful ADCs. Araris is currently working on three candidate therapies aimed at treating both blood and solid tumors, and it plans to move these into clinical trials by the end of this year and into the next.

The CEO and co-founder of Araris, Dragan Grabulovski, emphasized the potential of their unique ADC technology, stating it offers a significant advancement by potentially allowing for precise delivery of multiple therapeutic actions to tumors with reduced toxicity. This development marks a significant step forward in the ADC domain.

Taiho Pharmaceutical, a subsidiary of Otsuka from Japan, is known for its array of cancer medications available in the U.S., including Lytgobi for bile duct cancer, Lonsurf for colorectal cancer, and Inqovi for treating myelodysplastic syndromes. The company also markets various anticancer drugs in Japan. The acquisition of Araris and its innovative technology is expected to enhance Taiho's oncology pipeline and strengthen its position in the competitive cancer treatment market.

In summary, the acquisition of Araris Biotech by Taiho Pharmaceutical highlights a strategic move to leverage advanced ADC technology, aiming to develop more effective cancer therapies. This partnership underscores the ongoing trend in the pharmaceutical industry towards investing in innovative technologies that promise improved patient outcomes and expanded therapeutic options in oncology.