Daiichi Will Buy Plexxikon

Another Japanese pharmaceutical company is pursuing a major Western purchase. Daiichi Sankyo announced that it will pay $805 million up front for Plexxikon, a Berkeley, Calif.-based biotech firm.

Plexxikon could score an additional $130 million from the deal if its lead drug candidate, PLX4032, gains marketing approval.

PLX4032 has generated excitement as one of the most promising oncology candidates in the drug pipeline. The small molecule blocks a mutation BRAF, which occurs in about half of patients with melanoma, a form of skin cancer that has proven challenging to combat.

In January, Plexxikon reported early results from a Phase III clinical trial showing PLX4032 increased overall survival of melanoma patients with the BRAF mutation when compared with dacarbazine, the current standard of care. With Roche, its development partner for PLX4032 in the U.S. and Europe, Plexxikon expects to file for regulatory approval in those markets later this year.

In addition to PLX4032, Daiichi gains a Plexxikon compound that blocks three kinases and is expected to begin Phase II trials for the treatment of several cancers later this year. For Daiichi, the purchase adds to an oncology drug portfolio that has expanded in recent years through a marketing pact with Amgen and the purchase of Germany’s U3 Pharma.

The deal is the latest in a spate of licensing agreements and acquisitions by Japanese drug companies. In the past month, Kyowa Hakko Kirin agreed to pay $470 million for Scottish specialty pharma firm ProStrakan; Astellas Pharma forked over $125 million for Aveo Pharmaceuticals’ tivozanib, a cancer drug in Phase III trials; and Astellas agreed to pay $68 million for the European rights to Optimer Pharmaceuticals’ narrow-spectrum antibiotic fidaxomicin, which is under regulatory review in the U.S. and Europe.

The Japanese spending spree is driven by aging product portfolios, government price pressures, and a sudden influx of generic drug competition in Japan that has many firms scrambling to increase their presence abroad, says Michael Latwis, corporate analyst for Pharmaview, part of the health care consulting firm Decision Resources. The strength of the yen against the dollar has made U.S. assets particularly attractive, Latwis adds.