– Transaction Includes JNT-517, a Potential First-In-Class Oral Treatment for Phenylketonuria (PKU) – 

– Expands Specialty and Autoimmune Portfolios and Drug Discovery Technologies – 

August 1, 2024 – Tokyo and Boston – Otsuka Pharmaceutical Co., Ltd. (Otsuka) and Jnana Therapeutics Inc. (Jnana) today announced that they have entered into a definitive merger agreement pursuant to which Otsuka will acquire Jnana, making it a wholly owned subsidiary through Otsuka’s 100-percent owned subsidiary, Otsuka America, Inc. (OAI). The acquisition is expected to be completed in the third quarter of fiscal 2024, subject to customary closing conditions. 

Based on the terms of the agreement, Otsuka will pay USD $800 million to the shareholders of Jnana upon completion of the acquisition, as well as up to an additional USD $325 million in development and regulatory milestones.

1. Reasons for the acquisition

Jnana’s novel approach to drug discovery is enabled by RAPID – the company’s next-generation chemoproteomics platform designed to discover medicines for highly validated but challenging-to-drug targets. The platform leverages a high-throughput, binding-based screening approach that is inherently flexible, enabling the discovery of binding sites across the surface of a target protein and the identification of small molecules that elicit diverse pharmacologies. Jnana has used RAPID to successfully identify first-in-class compounds and address a range of historically challenging-to-drugtarget classes, including solute carriers, transcription factors, and signaling scaffold proteins. Jnana pursues drug discovery based on concepts that are complementary to those of Astex Pharmaceuticals, a subsidiary of Otsuka based in Cambridge, UK.

While Jnana’s RAPID platform is not limited to any specific therapeutic area, the company has built a unique competitive position by concentrating on PKU, a rare inherited metabolic disorder in which phenylalanine accumulates to abnormally high levels in the blood, and autoimmune diseases, where small molecule drug discovery has been challenging. Jnana’s technology successfully generated JNT-517, an allosteric small molecule inhibitor of SLC6A19, an SLC (solute carrier) that regulates amino acid reabsorption in the kidney. JNT-517 has the potential to become a first-in-class oral treatment for PKU, as it has been shown to be effective, well-tolerated, and safe in a Phase 1b/2 study. A majority of the PKU population is not effectively treated with existing therapies, and JNT-517 is an approach that could address individuals of all ages across the spectrum of mild to severe disease.

In the autoimmune disease field, the company is pursuing small molecule drug discovery for highly validated, but challenging-to-drug, targets such as interferon regulatory factor 3 (IRF3), a master transcription factor for the production of interferon.

Otsuka has advanced contributions to patients with a wide range of rare diseases, not only in the renal area with JINARC (approved for autosomal dominant polycystic kidney disease), sibeprenlimab (IgA nephropathy), and voclosporin (lupus nephritis), but also by adding new specialty drugs such as donidalorsen (hereditary angioedema). Additionally, through Visterra, a Boston-based company that Otsuka acquired in 2018, Otsuka is advancing research and development in the autoimmune field using antibody drug technology, while also expanding its drug discovery platform.

Makoto Inoue, president and representative director of Otsuka Pharmaceutical commented, “I am gratified that Otsuka has entered into an agreement with Jnana. The addition of Jnana’s drug discovery technology and small molecule pipeline in PKU and autoimmune diseases will strengthen our R&D in the Boston area of the U.S., one of the most important bioclusters in the world, and in a combined form will have a synergistic effect on Otsuka Pharmaceutical’s global expansion.”

Joanne Kotz, Ph.D., CEO and co-founder of Jnana, commented, “This transaction recognizes the Jnana team’s accomplishments since the founding of the company, which include creating RAPID – a world-class small molecule drug discovery platform. Leveraging our platform, the team discovered JNT-517, a potential first-in-class oral medicine for the treatment of PKU, and has demonstrated positive clinical proof of concept for JNT-517 in individuals with PKU. We are excited to join Otsuka with our shared goal of developing transformative therapies for patients and look forward to advancing JNT-517 into a registrational study in 2025 and continuing to progress our pipeline of innovative oral medicines for autoimmune diseases.”

2. Outline of the acquisition

Upon completion of the acquisition, Jnana will operate as a wholly owned subsidiary of Otsuka in Boston and will continue its research and development. The acquisition will be implemented by merging a special purpose company, established under OAI for this acquisition, into Jnana Therapeutics, with Jnana remaining as the surviving company. Existing shareholders of Jnana will be paid cash as consideration for this merger. Although the Boards of Directors of both Otsuka and Jnana have approved this acquisition, the execution of this acquisition may require the approval of Jnana’s shareholders and the fulfillment of conditions under U.S. antitrust laws. After completion of necessary procedures, we aim to complete the acquisition during the third quarter of 2024.

3. Additional information about Otsuka (https://www.otsuka.co.jp/en/)

Otsuka Pharmaceutical Co., Ltd. is a global healthcare company with the corporate philosophy: Otsuka–people creating new products for better health worldwide. Otsuka researches, develops, manufactures, and markets innovative products, with a focus on pharmaceutical products to meet unmet medical needs and nutraceutical products for the maintenance of everyday health.

In pharmaceuticals, Otsuka is a leader in the challenging areas of mental, renal, and cardiovascular health and has additional research programs in oncology and on several under-addressed diseases including tuberculosis, a significant global public health issue. These commitments illustrate how Otsuka is a “big venture” company at heart, applying a youthful spirit of creativity in everything it does.

4. Additional information about Jnana (https://www.jnanatx.com/)

Jnana Therapeutics is a clinical-stage biotechnology company leveraging its next-generation RAPID chemoproteomics platform to discover medicines for highly validated, challenging-to-drug targets to treat diseases with high unmet needs. Jnana is focused on developing first- and best-in-class therapies to treat a wide range of diseases, including rare diseases and immune-mediated diseases. Jnana’s lead program, JNT-517, which targets an allosteric site on the phenylalanine transporter SLC6A19, is a potential first-in-class oral approach for the treatment of PKU, a rare genetic metabolic disease. Located in Boston, Jnana brings together scientific leaders in small molecule drug discovery and development, a highly experienced management team, and the backing of leading life science investors Bain Capital Life Sciences, RA Capital Management, Polaris Partners, Versant Ventures, Avalon Ventures, Pfizer Ventures, and AbbVie Ventures.

5. Advisors

Centerview Partners LLC acted as financial advisor to Jnana and Latham & Watkins LLP acted as its legal advisor.

Media Contacts

For Otsuka Pharmaceutical:

Jeffrey Gilbert

[email protected]

For Jnana Therapeutics:

Adam Silverstein

[email protected]