Takeda Pharmaceutical Co. Ltd. in Osaka, Japan, bought Inviragen for $35 million in cash as well as future payments of as much as $215 million if Inviragen hits certain revenue targets. The sale was announced May 7 and is expected to close within weeks.
The purchase should give Northern Colorado greater standing as larger companies seek takeover candidates, people in the life sciences industry say. They have lamented the challenges of raising money for the capital-intensive industry in a state where financing has significantly declined. Venture capitalists injected $4.1 billion into Colorado companies in 2000; investments declined to $610.6 million in 2011, according to PricewaterhouseCoopers.
Industry representatives now hope the acquisition breathes new life into the sector.
“Fort Collins and Northern Colorado are starting to get some credibility behind the cluster that’s growing there,” said April Giles, chief executive of the Colorado BioScience Association in Denver. “I think investors are starting to look at that cluster and realize that there’s good momentum and really great opportunity for partnership on the ground.”
Privately held Inviragen, based in Fort Collins with facilities in Madison, Wis., and Singapore, specializes in research and development of vaccines for infectious diseases such as dengue; hand, foot and mouth disease; and chikungunya, a viral disease transmitted by mosquito bites that can cause illness. Established in 2005, the company makes DENVax, a dengue vaccine that is being evaluated in phase 2 clinical trials. It employs about 50 people.
Inviragen had discussed acquisition with a number of major pharmaceutical companies after it made progress during clinical trials on its vaccines, said Dan Stinchcomb, Inviragen CEO and co-founder. He declined to name the company’s suitors.
“Inviragen knew that we’d have to identify a partner that would have the resources to be able to move the vaccines into this late development stage and on into the marketplace,” he said.
Inviragen learned that it fit the strategy of Takeda, the largest pharmaceutical company in Japan, to develop vaccines for unmet public health needs, he said.
Takeda will integrate the company into its vaccine business division in Deerfield, Ill. It’s unclear what portion of Inviragen will remain in Fort Collins, but Stinchcomb said Takeda “values the resources that we built” in the city.
Northern Colorado has about 50 growing life sciences companies, and the industry employs 2,000, according to the Northern Colorado Economic Development Corp.
Other companies in the area may have similar opportunities to be acquired, Giles said. Large pharmaceutical and life science companies that have reduced their research and development are looking to fund successful smaller companies that engage in that kind of work.
“If they’re successful, then they’ll acquire them,” Giles said.
Deanna Scott, executive director of the Northern Colorado Bioscience Cluster, described Inviragen as unique among the region’s life sciences companies because it focuses on infectious diseases. The nonprofit cluster aims to help grow Northern Colorado’s life science industry.
As the Northern Colorado industry’s “biggest success story,” Inviragen’s acquisition sheds light on Northern Colorado’s potential, Scott said. She isn’t sure the acquisition alone will lead to additional takeovers of Northern Colorado companies, but “it definitely helps.”
The larger impact will take place globally, Scott said. Inviragen now will have the funding to continue developing its dengue vaccine.
“It’s essential not only to come up with a vaccine,” she said, “but it also would make a tremendous economic impact on the majority of the world.”
Dengue, a disease caused by viruses transmitted to people by bites from infected mosquitoes, affects as many as 100 million people annually, according to the Centers for Disease Control and Prevention. It is the leading cause of illness and death in tropical regions.
No licensed dengue vaccine is available currently, so improving immunity would represent a major advance in controlling the disease, according to the World Health Organization.
DENVax, developed with help from scientists at the CDC’s Division of Vector-Borne Diseases in Fort Collins, is designed to protect against all four strains of dengue fever.