Staff Writer

Less than two years into a three-year drug discovery collaboration, Takeda Pharmaceutical Co. Ltd. elected to acquire partner Paradigm Therapeutics Ltd.

Terms of the deal were not disclosed, but Paradigm has raised about $66.6 million in venture capital financing to date. That figure includes both direct investments and funds raised by Amedis Pharmaceuticals Ltd., which Paradigm acquired in 2005. Paradigm also can claim revenue streams from drug discovery partnerships with Takeda and Ortho-McNeil Inc., a unit of New Brunswick, N.J.-based Johnson & Johnson.

Mark Carlton, chief scientific officer of Cambridge, UK-based Paradigm, said Takeda acquired Paradigm for its "entire scientific assets." Those assets include a target validation technology and a pipeline of preclinical compounds for endocrinology, pain, central nervous system disorders, metabolic disease and inflammation.

Paradigm's pipeline should complement Takeda's existing position in CNS disease, where it markets Provigil (modafinil) with Cephalon Inc., and in diabetes, where it has Basen (voglibose), Actos (pioglitazone hydrochloride) and a dipeptidyl peptidase IV (DPP4) inhibitor program licensed from PPD Inc. On the technology side, Paradigm's platform will add to drug discovery capabilities Takeda gained through the 2005 acquisition of Syrrx Inc. and deals with companies like Arius Research Inc.

Paradigm's target validation technology involves using bioinformatics to mine the human genome for druggable genes with unknown functions. Paradigm then identifies mouse homologues of the genes and uses knockout models to determine their function. The approach has yielded 800 potential druggable targets, more than 200 of which are undergoing biological validation.

Paradigm's most advanced candidate is PTD634, a preclinical gonadotrophin-releasing hormone (GnRH) antagonist for the treatment of sex hormone-dependent diseases including hormone-dependent prostate cancer, benign prostatic hyperplasia, endometriosis, precocious puberty and assisted reproduction. The company also has identified GPR54 antagonists for use in endocrinology and a compound for pain.

Through its partnership with Ortho-McNeil, entered in mid-2005, Paradigm is using its target validation platform to discover and develop drugs against a single target involved in pain and urinary incontinence. Carlton said he "does not anticipate that changing" due to the acquisition.

The Takeda collaboration, also signed in mid-2005, focused on using the platform to identify drug targets in the central nervous system field. In addition to up-front payments and eventual royalties, Paradigm originally was due to receive up to $18 million per product based on research, clinical and regulatory milestones. Carlton confirmed the collaboration was "going well" and had yielded several targets prior to the acquisition.

As to which products will move forward into clinical trials from the Takeda collaboration and from Paradigm's own pipeline, Carlton said the two companies will go through a "detailed integration phase" and "review the portfolio in detail" prior to making any decisions.

Final closing of the acquisition is anticipated to occur in the next few weeks. At that time, Paradigm will become a subsidiary of Takeda Europe Holdings B.V., a wholly owned subsidiary of Osaka, Japan-based Takeda. Paradigm's name will change to Takeda Cambridge Ltd., and Paradigm's subsidiary in Singapore will be renamed Takeda Singapore Pte Ltd.

Carlton said he anticipates that Takeda will make investments into both the Cambridge and Singapore Paradigm locations. The Cambridge facility, which specializes in both biology and chemistry, represents Takeda's first major research and development base in Europe, and the Singapore facility will provide additional capacity in biology as well as some specialized biology functions.

Explaining how the acquisition benefits both parties, Carlton said, "Takeda has its globalization strategy, and we're a private company that needs to move to the next stage."

Founded in 1999 as a spinout from the Wellcome/CRC Institute of the University of Cambridge, Paradigm built a proprietary in vivo functional genetics platform and added chemistry capabilities through the acquisition of Amedis. Paradigm's most recent financing, a fourth round closed in July 2006, brought in $13.5 million.

Investors included Avlar BioVentures, Bio*One Capital, Merlin Biosciences and Lloyds Development Capital. Additional investors in the company include TTP Ventures, The Wellcome Trust, University of Cambridge and Genmab A/S.