Edison Pharma in deal with Dainippon Sumitomo potentially worth $4.3 billion

Privately-held US company Edison Pharmaceuticals has entered into a new strategic alliance valued up to $4.295 billion with Japanese drug major Dainippon Sumitomo Pharma (TYO: 4506; DSP) for the development of drugs targeting cellular energy metabolism.

Under the terms of the accord, DSP will gain select development and commercialization rights in Japan and North America to jointly discovered drugs in exchange for $10 million upfront and $40 million payment in R&D support. In addition, DSP will fully fund the development of 10 new jointly discovered drugs through Investigational New Drug (IND) filing and broaden its rights to EPI-589, currently in Phase Ib, to include North America.

In exchange, Edison will be eligible to receive in total between $30 million and $105 m per indication associated with successful development of EPI-589 in North America; between $10 million and $30 million per indication in development milestones associated with successful development of jointly discovered compounds in Japan and North America; up to $3.86 billion in commercial milestone payments for jointly discovered compounds and EPI-589 in total; and double-digit royalties on commercial sales. DSP will also invest $50 m in Edison through a preferred stock purchase agreement. At the discretion of Edison, DSP will invest an additional $50 million in the period between the first and fifth anniversaries of the initial equity closing.