bacTRAP, do it again

OSAKA, Japan—On Nov. 6, Takeda Pharmaceutical Co. Ltd., aone-time investor and long-term collaborator of Envoy Therapeutics Inc., madethose relationships more permanent with the announcement that it will acquireprivately held Envoy for the total consideration of $140 million.

That sum includes upfront and progress-dependent preclinicalmilestone payments, and will be paid by Takeda's wholly owned subsidiary,Takeda America Holdings Inc., giving the company 100-percent equity in Envoy.

When Envoy raised its Series A financing in 2009, Takeda wasone of three initial investors in the company. By 2010, the two companiesformed a three-year research alliance aimed at discovering safer and moreeffective drugs for schizophrenia.

"Our investors had the expectation that we would do a coupleof rounds of financing, and we were actually contemplating conducting a SeriesB financing this year to advance our pipeline into the clinic," RobertMiddlebrook, Envoy's chief financial officer, tells ddn, "but these discussions started happening in parallel to that.After working with our scientists for a couple of years as an investor, then aboard member, then as a collaborator, they got to know our technology andability to execute very well."

Since then, "it has been clear to us that Envoy's scientificexcellence in combination with their vision for the utilization of bacTRAPtechnology have great potential to create and explore truly innovative targetsacross multiple therapeutic areas," said Dr. Paul Chapman, general manager ofTakeda's pharmaceutical research division, said in the press release announcingthe deal.

Envoy's bacTRAP technology combines genetic engineering withmolecular biology techniques for labeling and extracting the protein-makingcomponents of specific types of cells. The technology is especially powerful inthe brain, where many hundreds of cell types are intermingled, but isapplicable to therapeutic areas beyond the central nervous system (CNS), saysMiddlebrook.

"Our current focus is on CNS diseases because bacTRAP is soprevalent in the brain, and since Takeda already has preclinical programsacross a broad range of CNS areas, we view our programs as complementary," hesays. "Our programs have focused on cognition-impaired conditions likeParkinson's disease, schizophrenia, addiction and pain, but the technology isapplicable in any tissue of the body."

Takeda's expertise and resources "will enable the widespreadapplication of Envoy's bacTRAP technology," said Mr. Brad Margus, CEO anddirector of Envoy, in a statement. "Our scientists are thrilled by theopportunity to deploy bacTRAP's unique capabilities across numerous newtherapeutic areas."

Envoy will continue operations at its Jupiter, Fla.,location through the first quarter of 2013, after which nearly two-thirds ofits 21 employees will relocate to Takeda's facilities in La Jolla, Calif.,according to Middlebrook.

Envoy's Florida operations were located adjacent to the campus of theScripps Research Institute, whose scientists enjoyed a strategic relationshipwith the company, using their high-throughput, robotic systems and chemicallibraries to screen hundreds of thousands of chemical compounds for activationor inhibition of the biological targets that Envoy scientists identified.