Japan's Astellas to sell diabetes patent assets for $609 million; debuts Advagraf in India

Japan’s second largest drug company, Astellas (TYO: 4503), yesterday revealed that it will sell its patent estate relating to diabetes treatments, a non-core business for the firm, to US investment fund Royalty Pharma, for $609 million, thus shedding a non-core asset acquired with its hard fought for $4 billion takeover last year of USA-based OSI Pharmaceuticals (The Pharma Letter May 17, 2010).

Specifically, OSI’s UK-based biotech subsidiary Prosidion has sold its dipeptidase IV (DPP-IV) inhibitor patent estate for type 2 diabetes therapy, and the associated royalty stream, to Royalty Pharma. "The sale of this large, passive, non-core financial asset will free up capital for reinvestment in strategic initiatives," Astellas Chief Executive Yoshihiko Hatanaka said in a statement.

Under the terms of the deal, Royalty will receive 100% of royalty payments and milestones relating to the DPP-IV assets and existing licensing deals, and will take over from Prosidion the relevant patent estate and its management. Prosidion acquired a portfolio of medical-use patents relating to the use of DPP-IV inhibitors in the treatment of type 2 diabetes back in 2004, and has since nonexclusively out-licensed the IP to pharmaceutical companies worldwide.