Taiho Pharmaceutical to acquire Araris Biotech for up to $1.14 billion

Investing.com -- On Monday, Taiho Pharmaceutical (TADAWUL:2070) Co., Ltd. announced a definitive agreement to acquire Araris Biotech AG, a Swiss biotech company specializing in next-generation antibody drug conjugates (ADCs). The $400 million deal, with additional milestone payments up to $740 million, is set to be completed in the first half of 2025. The agreement follows a research collaboration initiated in November 2023 between the two companies.

Araris, emerging from the Paul-Scherrer-Institute in Switzerland, is known for its innovative ADCs which offer improved design, high linker solubility, and simpler manufacturing. These advancements aim to overcome the limitations of existing ADCs. Their proprietary ADC linker platform, AraLinQ™, has produced ADC candidates that are more uniform, stable, and potent, showing greater safety and antitumor effects in preclinical studies. Araris is also progressing three preclinical-stage products for hematological and solid tumors, expected to enter clinical trials between 2025 and 2026.

Taiho Pharmaceutical, recognized for its antimetabolites and small molecule drug discovery platform Cysteinomix, aims to enhance cancer treatment and patient care. The acquisition of Araris will complement Taiho's portfolio, particularly in oncology drug discovery.

Masayuki Kobayashi, President of Taiho Pharmaceutical, expressed confidence that Araris' expertise and technology will significantly enhance Taiho's drug discovery capabilities. Dima Kuzmin of 4BIO Capital commended the acquisition, emphasizing Taiho's capability to expedite the development of Araris’ treatments.

"We are proud to combine with Taiho and aim to turbo-charge the clinical development of our potent antibody-drug conjugate (ADC) candidates in hematological and solid tumors," Dragan Grabulovski, Ph.D., CEO and co-founder of Araris Biotech, told Investing.com following the annoucement. "The Araris approach is unique because it creates smart missile ADCs by attaching multiple cancer-fighting payloads to a single antibody in one step that mimic successful chemotherapy combinations in a targeted fashion to overcome persistent challenges of cancer resistance. Araris’ ADCs can potentially be safer and more efficacious than other ADCs because their proprietary conjugation technology AraLinQ™ connects the linker-payload to the antibody with exceptional stability, resulting in precise payload delivery to the tumor target and less toxicity in the bloodstream."

Grabulovski added, "We have been able to build a strong relationship with the Taiho team starting with our research collaboration that began in November 2023. In the course of this research collaboration, ADCs were created using Araris’ technology using antibodies to undisclosed targets. We look forward to working together to advance the future of cancer care."

Post-acquisition, Araris will operate as a fully owned subsidiary of Taiho Pharmaceutical, continuing its operations and research in Zurich, Switzerland. Their AraLinQ™ technology is notable for its site-specific payload attachment, maintaining antibody performance and exceptional stability, while improving solubility and enabling the delivery of multiple payloads.

MTS Health Partners, L.P, Wilson Sonsini Goodrich&Rosati PC, and Homburger AG are advising Taiho Pharmaceutical, while Centerview Partners UK LLP, Cooley LLP, and BGPartner Ltd are advising Araris on the transaction.