Wedding announcement: Daiichi Sankyo and Plexxikon

Practical Fragments has highlighted several mergers and acquisitions of fragment-based companies over the years, but yesterday’s announcement that Daiichi Sankyo plans to acquire Plexxikon for $805 million in up-front cash plus an additional $130 million in near-term milestones is definitely the largest. You may recall that PLX-4032, Plexxikon’s B-Raf kinase inhibitor, is currently in Phase 3 trials and a favorite to be the first fragment-based drug approved.

According to FierceBiotech, Plexxikon has raised a total of $67 million in venture funding, so a number of investors are likely popping Champagne. This is a nice validation of the value of fragment-based drug discovery, so let’s all raise a glass!

A Darwinian Marriage

The Galapagos Islands inspired Charles Darwin to develop his theory of evolution, and now Belgium-based Galapagos may be able to teach us something about the evolution of fragment-based drug discovery: the company recently announced the purchase of Sareum’s structure-based drug discovery services unit. A few days later, UK-based Sareum announced that it was discontinuing internal laboratory research.

Sareum’s platform focused on the crystallographic discovery and recombination of fragments; Galapagos is planning to merge these capabilities with their BioFocus DPI contract services group.

The price? Just £ 553,000, or a little more than $ 1,000,000 at the time of the announcement.

What conclusions can be drawn from this acquisition? On the one hand, clearly Galapagos feels the technology has value. On the other, a million dollars doesn’t go far these days; it would be difficult to put together the platform Sareum has been building since 2003 for this sort of money.

Obviously a single data point can not lead to a whole theory, but it does spawn many hypotheses. What does this mean for service-based business models? For valuations of European vs US companies? For the value (fiscal and scientific) of fragment-based drug discovery in general?