Taiho, an Otsuka unit, acquires Swiss startup Araris with three ADCs close to clinical trials

A small Swiss drug developer is being acquired for its innovative pipeline of three antibody-drug conjugates (ADCs) that offer a new-generation approach to oncology research and development, an area that has seen significant growth in recent years. Taiho Pharmaceutical, a subsidiary of Otsuka, announced its intention to purchase Araris Biotech, offering $400 million initially, with potential additional payments totaling up to $740 million. This acquisition marks Taiho as the latest pharmaceutical company to venture into the ADC sector, a field that has attracted interest from nearly all major drug manufacturers, either through acquisitions or licensing agreements over the past few years.

Araris Biotech, based in Zurich, has developed technology that allows for the attachment of multiple cytotoxic payloads onto an antibody, effectively mimicking traditional chemotherapy methods. Araris CEO and co-founder Dragan Grabulovski explained this capability in an interview with Endpoints News in January, highlighting that other companies are similarly exploring dual- or multi-payload ADCs. This technological advancement allows for enhanced treatment precision by ensuring that the ADC effectively binds to cancer cells, thanks to its high linker solubility which reduces clumping. Additionally, Araris boasts a streamlined manufacturing process utilizing readily available antibodies.

This acquisition comes shortly after Araris partnered with Roche’s Japanese subsidiary, Chugai, securing an undisclosed upfront payment and potential milestone payments of up to $780 million. At that time, Grabulovski had indicated a plan to initiate a Series B fundraising round in the first half of the year. To date, Araris has raised approximately $45 million from investors including Samsung Ventures, 4BIO, b2venture, Pureos Bioventures, redalpine, Schroders Capital, VI Partners, Wille AG, and the Institute for Follicular Lymphoma Innovation.

Taiho’s parent entity, Otsuka, has been actively expanding its portfolio, having acquired the small molecule drug discovery startup Jnana Therapeutics last year. Grabulovski shared that since November 2023, Taiho has thoroughly evaluated Araris’ technology, testing it with their antibodies, which ultimately led to acquisition discussions earlier this year. The acquisition agreement was finalized and signed on Monday morning, marking a significant milestone for both companies.

While Araris had been progressing with plans for Series B fundraising, these were put on hold as the acquisition discussions with Taiho developed. Nevertheless, the partnership with Chugai will continue, Grabulovski confirmed. Taiho disclosed plans to advance Araris’ three ADCs, aimed at treating solid tumors and blood cancers, into clinical trials between now and 2026. These ADCs focus on targeting CD79b, Nectin-4, and NaPi2b.

Dima Kuzmin, chair of Araris and managing partner at 4BIO, which initially funded Araris in 2020, emphasized the immense potential synergies stemming from Taiho’s extensive clinical development experience in oncology, combined with its robust global salesforce. These strengths are poised to maximize the impact of targeting high-potential, high-profile targets across various solid tumor indications.

On the same morning as the Taiho-Araris announcement, another significant deal in the pharmaceutical industry was reported. AstraZeneca disclosed its acquisition of a UK-based cell therapy company called EsoBiotec, for a sum of $425 million upfront, illustrating ongoing strategic movements within the sector.