On April 24, 2018 Takeda Pharmaceutical Company Limited ("Takeda") reported the statement made by Shire plc ("Shire") and confirms that it has made a revised proposal to the Board of Shire.

There can be no certainty that any firm offer for the Company will be made nor as to the terms on which any firm offer might be made.

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Other matters

In accordance with Rule 2.6(a) of the Code, Takeda must, by no later than 5.00 p.m. (London time) on 25 April 2018, either announce a firm intention to make an offer, subject to conditions or pre-conditions if relevant, for Shire in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for Shire, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the UK Panel on Takeovers and Mergers (the "Panel") in accordance with Rule 2.6(c) of the Code.

In accordance with Rule 26.1 of the Code, a copy of this announcement will be published on the Takeda website (View Source) by no later than 12 noon (London time) on April 25, 2018. The content of the websites referred to in this announcement is not incorporated into and does not form part of this announcement.

On April 24, 2018 Takeda Pharmaceutical reported that it has come back with an improved bid for Shire for $64 billion, making it the fifth round of talks (Press release, Takeda, APR 24, 2018, View Source [SID1234525662]). Shire is willing to recommend to the board to accept the offer with an extended deal deadline of May 8.

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"Following several offers from Takeda, the board requested that the advisers of Shire and Takeda enter into a dialogue to discuss whether a further, more attractive proposal may be forthcoming," said Susan Kilsby, Shire’s chairman, at the annual shareholder meeting in Dublin, which lasted only 15 minutes. "As of today the board can confirm that it is reviewing that offer. As of now we can only say that discussions between the advisers of Shire and Takeda are ongoing."

In late March, Takeda expressed an interest in acquiring Shire, although at that time no official bid had been made. Per UK law, Takeda had to make an official offer by 5:00 p.m. (London time) on April 25, 2018. On April 19, Takeda made an official bid of about $66.20 (U.S.) per share, which has a value of around $60 billion (U.S.). Shire rejected the bid, arguing that it undervalued the company.

Shortly afterwards, news broke that Allergan was in talks to acquire Shire, but several hours later Allergan announced it was no longer interested. On April 20, Takeda raised the bid.

In the middle of this, Shire sold its oncology business to France’s Servier for $2.4 billion. Oncology was a very small part of Shire’s portfolio, bringing in only $262 million in 2017. The sale was unrelated to the Takeda acquisition bid and had been ongoing since the beginning of the year.

According to Bloomberg, Takeda and Shire have been negotiating a price and a preliminary announcement may occur today. Under the UK acquisition rules, Takeda must announce a firm offer by Wednesday evening or abandon the approach. However, the companies can seek an extension to finalize a deal.

Aside from overall price, part of the sticking point appears to be amount of cash. The bid last Friday included 21 pounds a share in cash and 26 pounds in new stock for Shire.

Several Japanese lenders, including Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group, have agreed to finance the takeover, gathering together 1 trillion yen, or $9.3 billion. Shire’s market value is about $51 billion. Takeda’s market value is about $36 billion. At the end of 2017, Shire reported debt of around $19 billion.

In 2017, Takeda acquired ARIAD Pharmaceuticals for $5.2 billion. In January 2018, Takeda acquired Belgium’s TiGenix NV.

Most analysts expected Takeda to increase the cash portion of the deal, but didn’t see much room for maneuvering.

If the acquisition is completed, it would boost Takeda’s presence in cancer, gastrointestinal, neurology and rare diseases. Christophe Weber, Takeda’s chief executive officer, is pushing for overseas growth in the face of patent expirations and a shrinking domestic population. Bloomberg notes, "Acquiring Shire would vault Takeda, which has few late-stage experimental drugs in its own pipeline, into the ranks of the world’s top pharmaceutical companies. The Japanese company last week raised its offer to 47 pounds a share and lifted the cash portion of the bid after three prior proposals were rejected."

Analysts expect Takeda will seek short-term bank loans first, then replace them with longer-term funds by way of bond sales. S&P Global Ratings suggests that the acquisition would hurt the Japanese company’s credit score. Bloomberg writes, "If the firm borrows all of the cash portion, its ratio of net debt to earnings before interest, taxes, depreciation and amortization could temporarily worsen to 5.4 times, Mizuho Securities Co. estimates."

Atsushi Seki, an analyst at UBS Securities Japan Co., told Bloomberg, "Takeda’s credit could be downgraded to junk temporarily, probably just for the short-term—six months or one year," if the deal is completed.

On April 24, 2018 London-based investment management firm, Downing LLP, and BioScience Managers Limited, the international healthcare investment firm and advisers to the Downing FOUR VCT, reported the completion of a new £1.14 million investment in Wales-based ADC Biotechnology Ltd (Press release, ADC BIO, 24 24, 2018, View Source [SID1234525656]).

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ADC Biotechnology is creating innovative new technology, which aims to speed up, simplify and significantly lower the costs of the processes involved in the production of new antibody drug conjugates (ADCs). ADCs are antibodies that are attached to cancer-killing drugs using chemical ‘linkers’, allowing for targeted treatment of cancerous tissue.

The investment provided by Downing will be used by ADC Biotechnology to continue the development of its ‘Lock-Release’ product** and facilitate the company’s expansion to the US with quality control labs, equipment and the creation of new manufacturing infrastructure.

Jeremy Curnock Cook, Managing Director at BioScience Managers, commented:

"The healthcare industry is growing globally, funded by an ageing population in Western countries and increasing affluence in emerging markets such as China and India. ADC Biotechnology is ideally positioned to serve customers operating in these markets by applying its proprietary expertise to develop the next generation of cancer therapeutics."

Richard Lewis, Investment Director, Downing said:

"VCTs can be an ideal way for investors to access small specialist companies. They provide a portfolio of companies that can yield strong returns. Importantly, VCTs can facilitate the development of technologies to a point where they are recognised by the major players, therefore providing the opportunity for both consolidation and exit.

On April 24, 2018 Tarveda Therapeutics, Inc., a clinical stage biopharmaceutical company discovering and developing Pentarins as a new class of potent and selective cancer medicines, reported that it has dosed the first patient in a Phase 1/2a study evaluating PEN-866 in patients with advanced solid tumors (Press release, Tarveda Therapeutics, APR 24, 2018, View Source [SID1234525654]). miniature drug conjugate that selectively binds to the intracellular target Heat Shock Protein 90 (HSP90) and is linked to SN-38, a known and potent anti-cancer payload. The multi-center, dose escalation and expansion study will assess safety and efficacy across a range of tumor types including those previously shown to be sensitive to topoisomerase 1 inhibitors. This includes but is not limited to small cell lung, pancreatic, triple negative breast, colon and ovarian cancers and sarcomas.

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"This innovative approach of a drug conjugate which uses an HSP90 inhibitor to facilitate intracellular, tumor-targeted delivery of the topoisomerase 1 inhibitor SN-38 is a promising treatment for patients with cancer," said Anish Thomas, MBBS, M.D., Lasker Clinical Research Scholar and Principal Investigator, Developmental Therapeutics Branch, Center for Cancer Research, at the National Cancer Institute (NCI), part of the National Institutes of Health (NIH). "Preclinical studies of PEN-866 by a number of groups, including NCI researchers, have demonstrated efficacy and durability of response in multiple preclinical patient-derived and xenograft tumor models in a wide range of tumor types. Patients with these cancers are very much in need of effective new treatment options." Dr. Thomas and Dr. Yves Pommier, NCI’s Developmental Therapeutics Branch, are collaborating with Tarveda through a Cooperative Research and Development Agreement (CRADA).

Drew Fromkin, President and Chief Executive Officer of Tarveda commented, "There exists a large body of evidence demonstrating that HSP90 is upregulated and activated in tumors. This results in a change in HSP90’s binding conformation allowing for the extended retention and accumulation of cancer cell killing payloads in diverse, difficult-to-treat tumor types versus normal tissue. The dosing of our first patient with PEN-866 is a major accomplishment for our Company and demonstrates our commitment to linking potent, anti-cancer payloads to HSP90 small molecule targeting ligands."

Earlier this year, Tarveda announced plans to initiate the Phase 2a portion of the Phase 1/2a clinical trial for PEN-221, a Pentarin miniature conjugate designed to selectively bind to solid tumors expressing somatostatin receptor 2 (SSTR2). The Phase 2a portion of the trial has now been initiated and enrollment has begun in patients with small cell lung cancer as well as GI-midgut and pancreatic neuroendocrine tumors that express SSTR2.

The company is actively advancing its two clinical stage programs, PEN-221 and PEN-866, and other novel pre-clinical miniature conjugates.

Additional information on clinical trials being conducted by Tarveda is available at clinicaltrials.gov, through identifier number NCT03221400 for PEN-866 and NCT02936323 for PEN-221. Patients interested in enrolling in the PEN-866 clinical trial can contact Tarveda at [email protected] or call the National Cancer Institute’s toll-free number 1-800-4-Cancer (1-800-422-6237) (TTY: 1-800-332-8615).

About PEN-866
PEN-866 exploits the activation of Heat Shock Protein 90 (HSP90) in tumors to accumulate and release its potent anti-cancer payload, SN-38. PEN-866 is a miniature conjugate that comprises a small molecule, HSP90-targeting ligand linked to SN-38, the active metabolite of irinotecan. The conjugate accumulates and is retained in tumors and, by way of a sustained release of SN-38, causes prolonged DNA damage and tumor regressions in multiple patient-derived and other xenograft tumor models.

About Pentarins
Tarveda is developing Pentarins, potent and selective miniature drug conjugates with high affinity for specific cell surface and intracellular targets. Pentarins are engineered to bind to their tumor cell targets and provide sustained release of their potent therapeutic payloads deep into solid tumor tissue. Comprised of a targeting ligand conjugated to a potent cancer cell killing agent through a tuned chemical linker, Pentarins are designed to overcome the deficits of both larger antibody drug conjugates and small molecules that limit their therapeutic effectiveness against solid tumors. Together, the components of Tarveda’s Pentarins have distinct, yet synergistic, anticancer attributes: the small size of Pentarins allows for rapid and deep penetration into the tumor tissue, the ligand’s targeting ability allows for specific binding and retention in tumor cells, and the chemical linker is tuned to optimize the release of the potent, cell killing payload inside the cancer cells for efficacy.

On April 24, 2018 Checkmate Pharmaceuticals (Checkmate)  reported that it had initiated treatment with CMP‐001 combined with atezolizumab (TECENTRIQ) in a Phase 1b clinical trial of patients with advanced non‐small cell lung cancer (NSCLC) and disease progression on prior anti‐PD‐1/PD‐L1 therapy (Press release, Checkmate Pharmaceuticals, APR 24, 2018, View Source [SID1234525653]).

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CMP-001 is designed to activate innate immunity to convert "uninflamed" tumors, which generally do not respond to anti-PD-1/L1 therapy, into "inflamed" tumors, which are responsive to PD-1 inhibition. When used in combination with PD-1/PD-L1 inhibitors, CMP-001 has the potential to increase the number of cancer patients who respond to checkpoint inhibitor therapies and to increase the magnitude and duration of the antitumor responses, possibly providing added clinical benefit.

"We are pleased to be advancing the clinical development of CMP-001 into a second tumor type," stated Art Krieg, founder and CEO of Checkmate Pharmaceuticals. "The mechanism of action of CMP-001 should apply across most or all tumor types, and so we expect CMP-001 to reverse PD-1 resistance in NSCLC, just as we reported for PD-1 resistant advanced melanoma last week at the 2018 American Association of Cancer Research Annual Meeting in Chicago," noted Dr. Krieg.

The trial is designed as a multi-center, open label, two-part Phase 1b study of CMP-001 administered in combination with atezolizumab with and without low-level radiation therapy. Part one of the study will evaluate CMP-001 (5 mg dose) administered subcutaneously (SC) weekly for two weeks and then intratumorally (IT) weekly for three weeks, followed by either SC or IT injection every three weeks.

In the second part of the trial, the combination of CMP-001 and atezolizumab therapy will be preceded by low-level radiation therapy to the target lesion. "In our ongoing melanoma trial we learned that patients whose tumors contain more plasmacytoid dendritic cells (pDC) appear to be more likely to respond to CMP-001 in combination with checkpoint inhibitor therapy. Low dose radiation therapy recruits pDC into tumors, and so we expect this triple combination regimen to increase the response rate to our therapy," explained Dr. Krieg. Patients will be monitored for safety and tolerability, as well as clinical response. Correlative studies will also be undertaken to characterize the immune effects of treatment in the blood and tumors.

About CMP-001

CMP-001, is a first-in-class CpG-A Toll-like receptor 9 (TLR9) agonist, that is encapsulated in a virus-like particle (VLP) and is designed to activate the innate immune system via TLR9 and mediate tumor control by the subsequent induction of both innate and adaptive anti-tumor immune responses, thereby converting immunologically "cold" tumors to immunologically "hot" tumors. It is the only CpG-A class TLR9 agonist in clinical trials and differs from other CpG classes in clinical development by having a native DNA backbone that induces the highest levels of type I IFN. Based on analysis of gene expression in human tumors showing that increased IFN gene expression is associated with better response to PD-1 inhibition, it is believed that this mechanism of action may restore, enable or improve responses to anti-PD-1/PD-L1 therapeutics.

CMP-001 is being evaluated in multiple tumor types to assess its safety, activity, alternative routes of administration and combination with other immunotherapies and modalities. For information on CMP-001 trials that are currently recruiting patients, please visit www.clinicaltrials.gov.