TOKYO (Reuters) - Japan's Dainippon Sumitomo Pharma Co said on Wednesday that it will buy U.S.-based Boston Biomedical Inc for $200 million to expand its cancer treatment business and extend its global reach.
The Osaka-based drugmaker also said it would make up to $540 million in milestone payments for two experimental medicines to the unlisted Norwood, Massachusetts company, which specializes in cancer drugs.
It is the latest U.S. acquisition for Dainippon, which in 2009 bought for $2.6 billion the drugmaker Sepracor, now called Sunovion Pharmaceuticals, a specialist in treatments for central nervous and respiratory disorders.
"We are aiming to make the oncology area one of our future focus therapeutic areas next to the CNS area," Dainippon's president, Masayo Tada, said in a statement. "We intend to establish our R&D base in the U.S. to expand our presence in cancer treatment globally," he added.
Dainippon said it was attracted to two experimental products in Boston Medical's pipeline, BBI608 and BBI503, which are oral drugs that target cancer stem cells.
BBI608 is being prepared for Phase III clinical trials for colorectal cancer in North America and is in Phase I and II trials for various solid tumors. BBI503 is in Phase I trials for various advanced solid tumors, Dainippon said.
Dainippon said the boards of directors of it and Boston Biomedical had approved the acquisition and it expects to close the deal in April 2012 pending approval by U.S. regulators.
Citigroup Global Markets Japan acted as Dainippon's financial adviser, Dainippon said.
Shares of Dainippon closed down 0.8 percent at 843 yen prior to the announcement, against a 0.3 percent decline in Tokyo's broad Topix index.
(Reporting by Chris Gallagher; Editing by Matt Driskill)