Ultragenyx Pharmaceutical will license and co-develop at least one and possibly up to six candidates from Takeda Pharmaceutical, which in return will invest up to $65 million in the rare disease biopharma, the companies said today, under a collaboration whose total value was not disclosed.

As part of the companies’ strategic partnership, Ultragenyx will receive an exclusive license to one preclinical Takeda candidate in an unspecified predetermined area of use. Ultragenyx will retain an exclusive option to co-develop and co-commercialize the product candidate in additional therapeutic areas.

The companies said they also established a 5-year research collaboration in which Ultragenyx will have the option to license up to five additional Takeda product candidates for rare diseases—subject to conducting initial validation activities overseen by a joint research committee.

Takeda will receive an exclusive option to commercialize any licensed products developed through the collaboration in Asia, including Japan—as well as an option to license exclusively one Ultragenyx pipeline treatment in Japan.

Each company will receive potential development and sales milestone payments and royalties on net sales of licensed products by the other, Takeda and Ultragenyx said.

“This broad collaboration provides Ultragenyx with a product opportunity that is approaching clinical-stage development as well as a potential continued source of new product candidates that will help us achieve our goal of bringing a new therapy into the clinic every 1 to 2 years,” Ultragenyx CEO Emil D. Kakkis, M..D, Ph.D., said in a statement.

Takeda agreed to invest $65 million in Ultragenyx in two tranches. The first will consist of a $25 million stock purchase along with a $15 million cash premium at closing. This will be followed at Ultragenyx’s option, within 12 months, by a second equity purchase of $25 million with no additional premium.

Takeda has agreed to a potential third equity investment, tied to Ultragenyx achieving an undisclosed development milestone on a second asset.

“This partnership provides Takeda access to Ultragenyx’s strong patient-centric development and regulatory capabilities in the rare disease space, and could create significant value for both companies by delivering important new therapies to patients,” added Takeda Chief Medical and Scientific Officer Andrew Plump, M.D., Ph.D.

The transactions are subject to review under the Hart–Scott–Rodino Antitrust Improvements Act of 1976 and satisfaction of other customary closing conditions.

Takeda’s therapeutic areas consist of “general medicine,” including oncology, cardiovascular and metabolic, central nervous system, gastrointestinal, respiratory, and immunology, and vaccines.

Last year Takeda inked two collaborations offering potential for creating rare disease drugs. BioXcel launched a partnership of undisclosed value in April 2015 with Takeda’s U.S.-based global development group to repurpose compounds into new treatments for rare diseases.

Also that month, Takeda and Kyoto University’s Center for iPS Cell Research Application (CiRA) initiated a collaboration to develop clinical applications of induced pluripotent stem cells. CiRA said at the time that it anticipated the alliance would contribute to development of therapies for rare diseases as well as major diseases.

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