Japanese pharmaceutical company Daiichi Sankyo Co Ltd will acquire privately-held German biotechnology firm U3 Pharma AG for 150 million euros ($235 million).

Tokyo-based Daiichi Sankyo will acquire 100 per cent of U3 Pharma stock and make a one-time payment of 150 million Euros ($235 million) for the company.

 U3 Pharma AG was founded in 2001 by Professor Axel Ullrich of the Max Planck Institute of Biochemistry, whose pioneering gene technology-based  research led to the development of the oncology blockbusters Herceptin and Sutent.

Martinsried, Germany-based U3 Pharma focuses on research into antibodies for the treatment of cancer. The company currently employs 27 people, the majority of whom work directly in research and development.

The acquisition of U3 Pharma, with three monoclonal antibodies in development, will complement Daiichi Sankyo's oncology portfolio. The poducts under development include antibody treatments in breast, colon and lung cancers.

Daiichi Sankyo, Japan's third largest pharmaceutical company, is conducting Phase II trials of its oncologic agent to combat malignant neoplasms (CS-1008).
 
It has also commercial rights in Japan to market Amgen's denosumab (AMG 162), an osteoporosis/ bone metastases drug that is currently preparing for Phase III trials in the country. 

Daiichi Sankyo has also the exclusive rights in Japan to develop and market nimotuzumab (DE766) - an oncology agent in Phase I trials to treat advanced solid malignancies - which is licensed from CIMYM Biosciences.

While all these antibodies are in more advanced phases of development than U3 Pharma's lead compound (U3-1287, AMG-888), Daiichi Sankyo said U3-1287 is the first fully human anti-HER3 monoclonal antibody (mAb) to inhibit oncogenic signaling and tumor proliferation.

Daiichi Sankyo has a joint venture with another German company, MorphoSys AG, for its advanced human combinatorial antibody library.
 
 "One of our goals for Daiichi Sankyo is to increase our presence in novel therapeutics in the oncology arena," Takashi Shoda, president and CEO of Daiichi Sankyo, said in a statement.

Closure of the transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and customary closing conditions.

Japanese pharmaceutical companies are tapping into overseas biotech companies and products to boost their presence in the sector.

In April, Tokyo-based Astellas Pharma Inc tied up with South San Francisco-based CoMentis Inc. to develop a compound for Alzheimer's disease.

In February, Takeda Pharmaceutical Co. Ltd. and Amgen formed an alliance, in which Takeda gained licensing rights to 13 product candidates for a consideration exceeding $1.1 billion, and royalties thereafter.