Japan's Ono pays $2.4B for Qinlock maker Deciphera as biotech readies another approval run

Japan’s Ono Pharmaceutical is picking up Deciphera Pharmaceuticals for $2.4 billion, a price tag that brings both the approved cancer drug Qinlock and another candidate heading to the FDA’s desk in the coming months.

Under the deal, which is expected to close in the third quarter, Ono is acquiring all outstanding shares of kinase drug-focused Deciphera for $25.60 apiece in cash, which the pharma pointed out was an almost 75% premium on the Waltham, Massachusetts-based biotech’s Friday closing price of $14.65. The offer is the equivalent to a total equity value of around $2.4 billion, Ono added.

While not one of the largest biopharma deals of the year so far—a crown currently worn by Gilead Sciences' $4.43 billion acquisition of CymaBay Therapeutics in February—Ono’s $2.4 billion payout is a serious play by any measure.

“We expect that this acquisition of Deciphera will not only expand Ono's target oncology portfolio, but also accelerate Ono's business development in the United States and Europe, and strengthen kinase drug discovery research,” Ono’s CEO Gyo Sagara explained in the release.

Deciphera already has one drug on the market in the form of the gastrointestinal stromal tumor (GIST) drug Qinlock. The kinase inhibitor brought in $159.1 million for the full year 2023 under its current indication as a fourth-line treatment for GIST. The biotech has also run a study in second-line GIST with less success that led to a round of layoffs in 2022.

The oral tumor treatment vimseltinib looks set to follow in Qinlock’s footsteps, having passed a phase 3 test for patients with tenosynovial giant cell tumors in October 2023. Deciphera has set out plans to submit an approval application to the FDA in the second quarter of this year.

The Massachusetts biopharma’s other clinical asset is DCC-3116, an investigational switch-control kinase inhibitor of ULK1/2 designed to inhibit autophagy. The company is currently deciding on a phase 2 dose for expansion cohorts.

Further back in development is DCC-3084, a pan-RAF inhibitor due to enter the clinic in the first half of 2024, and a pan-KIT inhibitor called DCC-3009 that’s expected to follow it into the clinic in the second half of the year.

Ono described this portfolio as a “mature, diverse pipeline of best-or-first in class potential medicines” that could “enable Ono to build a robust presence in oncology, one of its key priority areas, and also support Ono’s efforts to become a global specialty pharma company.”

The Osaka, Japan-based pharma—which co-developed Bristol Myers Squibb’s blockbuster PD-1 drug Opdivo—has clearly been on the lookout for opportunities to pad out its pipeline this year, signing a $227 million biobucks deal with Shattuck Labs focused on autoimmune and inflammatory diseases in February.