Japan's DSP to buy US cancer start-up for $2.6 bn

Japanese drugs giant Dainippon Sumitomo Pharma will buy US biotechnology cancer specialist Boston Biomedical for a price that could hit $2.6 billion, the companies announced Thursday.

Under the agreed deal, DSP will pay the owners of privately held Boston Biomedical Incorporated $200 million up front.

The remaining $2.4 billion would be paid as the five-year-old US firm meets milestones in the development and selling of its stem-cell based cancer-fighting treatments.

One of its treatments, BBI608, is an oral anti-cancer drug which targets cancer stem cells. It is in the preparatory stage for Phase III trials for colorectal cancer.

Last year DSP signed an license option deal for the BB1608 treatment.

Another treatment, BBI503, which aims to kill highly malignant cancer stem cells, is currently in Phase I clinical trials for advanced solid tumors.

Massachusetts- based Boston Biomedical was founded in 2006 by Chiang Li, who is also the firm's chairman and chief executive.

The company's approach to cancer -- developing treatments aiming at cancer stem cells -- represents "an exciting new frontier for developing novel drugs against cancer" that can improve on conventional chemotherapy and targeted agents, Li said in a statement.

Masayo Tada, president and CEO of DSP, said Boston Biomedical has "excellent drug discovery/development platform" that will help DSP "make the cancer area one of our future focus therapeutic areas."