Otsuka Pharmaceutical Co., Ltd. and Jnana Therapeutics Inc. announced that they have entered into a definitive merger agreement pursuant to which Otsuka will acquire Jnana, making it a wholly owned subsidiary through Otsuka’s 100-percent owned subsidiary, Otsuka America, Inc. (OAI). The acquisition is expected to be completed in the third quarter of fiscal 2024, subject to customary closing conditions.
Based on the terms of the agreement, Otsuka will pay USD $800 million to the shareholders of Jnana upon completion of the acquisition, as well as up to an additional USD $325 million in development and regulatory milestones.
Jnana’s novel approach to drug discovery is enabled by RAPID – the company’s next-generation chemoproteomics platform designed to discover medicines for highly validated but challenging-to-drug targets. The platform leverages a high-throughput, binding-based screening approach that is inherently flexible, enabling the discovery of binding sites across the surface of a target protein and the identification of small molecules that elicit diverse pharmacologies. Jnana has used RAPID to successfully identify first-in-class compounds and address a range of historically challenging-to-drug target classes, including solute carriers, transcription factors, and signaling scaffold proteins. Jnana pursues drug discovery based on concepts that are complementary to those of Astex Pharmaceuticals, a subsidiary of Otsuka based in Cambridge, UK.
While Jnana's RAPID platform is not limited to any specific therapeutic area, the company has built a unique competitive position by concentrating on PKU, a rare inherited metabolic disorder in which phenylalanine accumulates to abnormally high levels in the blood, and autoimmune diseases, where small molecule drug discovery has been challenging. Jnana’s technology successfully generated JNT-517, an allosteric small molecule inhibitor of SLC6A19, an SLC (solute carrier) that regulates amino acid reabsorption in the kidney. JNT-517 has the potential to become a first-in-class oral treatment for PKU, as it has been shown to be effective, well-tolerated, and safe in a Phase 1b/2 study. A majority of the PKU population is not effectively treated with existing therapies, and JNT-517 is an approach that could address individuals of all ages across the spectrum of mild to severe disease.
In the autoimmune disease field, the company is pursuing small molecule drug discovery for highly validated, but challenging-to-drug, targets such as interferon regulatory factor 3 (IRF3), a master transcription factor for the production of interferon.
Otsuka has advanced contributions to patients with a wide range of rare diseases, not only in the renal area with JINARC (approved for autosomal dominant polycystic kidney disease), sibeprenlimab (IgA nephropathy), and voclosporin (lupus nephritis), but also by adding new specialty drugs such as donidalorsen (hereditary angioedema). Additionally, through Visterra, a Boston-based company that Otsuka acquired in 2018, Otsuka is advancing research and development in the autoimmune field using antibody drug technology, while also expanding its drug discovery platform.
Makoto Inoue, president and representative director of Otsuka Pharmaceutical commented, "I am gratified that Otsuka has entered into an agreement with Jnana. The addition of Jnana's drug discovery technology and small molecule pipeline in PKU and autoimmune diseases will strengthen our R&D in the Boston area of the U.S., one of the most important bioclusters in the world, and in a combined form will have a synergistic effect on Otsuka Pharmaceutical's global expansion.”
Joanne Kotz, Ph.D., CEO and co-founder of Jnana, commented, "This transaction recognizes the Jnana team’s accomplishments since the founding of the company, which include creating RAPID – a world-class small molecule drug discovery platform. Leveraging our platform, the team discovered JNT-517, a potential first-in-class oral medicine for the treatment of PKU, and has demonstrated positive clinical proof of concept for JNT-517 in individuals with PKU. We are excited to join Otsuka with our shared goal of developing transformative therapies for patients and look forward to advancing JNT-517 into a registrational study in 2025 and continuing to progress our pipeline of innovative oral medicines for autoimmune diseases."
Upon completion of the acquisition, Jnana will operate as a wholly owned subsidiary of Otsuka in Boston and will continue its research and development. The acquisition will be implemented by merging a special purpose company, established under OAI for this acquisition, into Jnana Therapeutics, with Jnana remaining as the surviving company. Existing shareholders of Jnana will be paid cash as consideration for this merger. Although the Boards of Directors of both Otsuka and Jnana have approved this acquisition, the execution of this acquisition may require the approval of Jnana's shareholders and the fulfillment of conditions under U.S. antitrust laws. After completion of necessary procedures, the acquisition is projected to be completed during the third quarter of 2024.
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