Takeda forms broad drug discovery pact with Charles River

By Nick Taylor

- Last updated on GMT


Related tags Shire Takeda Charles river laboratories

Takeda tasks Charles River with sorting through “plethora” of early stage assets.

The $62bn (€56bn) takeover of Shire​ has significantly expanded Takeda’s pipeline. With three internal research sites, Takeda decided to enlist third-party support to quickly and efficiently sort through its assets, leading it to enter into an agreement with Charles River Laboratories.

James Foster, CEO of the preclinical contract research organization (CRO), explained the thinking behind the deal and how it came about in a question and answer session at the J.P. Morgan Healthcare Conference.

Foster said, “They came to us and they said, ‘We’re going to have a bunch of molecules, small and large, that we will want you to prosecute’. I think that they’re stepping back and taking a look at the plethora of drugs that they have. I think [it’s] a way to expand their bandwidth to get these drugs prosecuted without all of the upfront work. I think it’s clever on their part​.”

Takeda is making an upfront payment to get Charles River to take on the work. Having received the money, Charles River will assess the molecules, which span multiple therapeutic areas, and decide which ones it wants to prosecute.

Charles River is in line to receive milestone payments of escalating size as the assets it picks to take forward advance through development.

The deal structure differs from Charles River’s typical, fee-for-service way of working. Rather than guaranteed money in exchange for services, Charles River will get payments based on the success of the molecules it chooses to advance.

The structure makes the decisions about which drugs to prosecute critical to the commercial value of the deal to Charles River. Foster thinks Charles River has the capabilities to make the deal work.  

Charles River’s CEO said, “Our scientists are quite capable of at least being able to discern what we think is likely to go well. We can opt in or out. They can opt in or out, in terms of whether or not they want the drug back​.”

Historically, Charles River has eschewed milestone-based, risk-sharing type deals in favor of getting paid directly for its work. This has begun to change recently as Charles River has entered into small deals with different payment structures, but the Takeda agreement is a step up in scale.

In explaining why Charles River now entertains such deals, Foster said the CRO needs “to be open to different ways that the clients want to work​.” However, it is unclear at this stage whether the Takeda deal is likely to be a one-off or the start of a new way of working.

Foster said, “I don’t know whether it will become a template. If we do well with it, I think it could be. Others will see this, so we could have some inbound requests. We’ll see whether we like the deals, whether we like the potential client.”

“I don’t think that this is necessarily going to become a way that we work but perhaps something that we’re open to. It will take a while for this to play out,​” he concluded.

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