Bain Capital acquires Mitsubishi Tanabe Pharma

USA – US-based Bain Capital has announced a US $3.4 billion deal to acquire Mitsubishi Tanabe Pharma, marking one of the largest private equity buyouts in Japan’s healthcare sector in recent years.

The acquisition includes Mitsubishi Tanabe’s subsidiaries Medicago and Alpha Therapeutics. Mitsubishi Chemical Group, the parent company, had been exploring options for the business since last year, citing the need for significant investment to support drug development.

According to Mitsubishi Chemical, the deal will help address challenges in advancing therapeutic drugs for diseases like cancer, central nervous system disorders, and immuno-inflammatory conditions.

The company emphasized the necessity of ongoing investments to improve Mitsubishi Tanabe’s research and development capabilities.

“With the advancement of therapeutic drugs and diversification of modalities, the disease areas with unmet needs are gradually shrinking,” it said in a statement.

“Moreover, given that the possibility of success of drug discovery is not high, continuous additional investments are essential for achieving further growth.”

The acquisition is expected to be finalized by the third quarter of this year. Interestingly, the transaction follows speculation that another US private equity firm, Blackstone, was also considering a bid for Mitsubishi Tanabe Pharma.

Mitsubishi Tanabe’s sales performance has shown steady growth. For the nine months ending March 31, the company reported revenues of JPY 349 billion (US $2.3 billion), up by JPY 11.2 billion from the same period the previous year.

This growth was attributed to the success of Radicava ORS (edaravone), a treatment for amyotrophic lateral sclerosis (ALS) in the US, and Japanese sales of obesity drug Mounjaro (tirzepatide), licensed from Eli Lilly.

However, gains were somewhat offset by price cuts on domestically sold medicines following revisions by Japan’s National Health Insurance (NHI). Looking ahead, Bain Capital sees potential in Japan’s life sciences industry.

Ricky Sun, a partner at Bain Capital, stated, “We believe there are promising signs for growth and untapped opportunities in Japan’s life sciences industry as government and regulators have launched several initiatives to accelerate the development and approval of innovative medicines in the Japanese market.”

Mitsubishi Tanabe’s global pipeline features several promising treatments, including roluperidone for schizophrenia, which remains in phase 3 trials in Europe despite its rejection for approval in the US last year.

Additionally, the company is developing a continuous pump formulation of levodopa/carbidopa for Parkinson’s disease, aimed at competing with AbbVie’s Produodopa.

The pipeline also includes dersimelagon, a selective melanocortin 1 receptor agonist, currently in phase 3 trials for porphyrias and phase 2 trials for systemic sclerosis.