Sumitomo Dainippon makes US acquisition

Japanese drugmaker Sumitomo Dainippon Pharma (TYO: 4506) has made its first venture into the M&A arena this year, with the proposed acquisition of a privately-held cancer-focussed US company.

According to the terms of the agreement with Tolero Pharmaceuticals, Sumitomo Dainippon Pharma will make an upfront payment of $200 million to the shareholders of Tolero on closing of the acquisition, and thereafter it will make development milestone payments up to $430 million related to the compounds being developed by Tolero based on its progress.

Furthermore, after the launch, Sumitomo Dainippon Pharma will also make commercial milestone payments up to $150 million, based on the net sales of the compounds, meaning that the transaction, which is expected to close in February 2017, could be worth as much as $780 million.