JapanBridge, Inc. Signs Alliance with Kyowa Hakko Kogyo Co., Ltd.; Closes $6.5 Million Series A-2 Preferred Financing

TOKYO--(BUSINESS WIRE)--JapanBridge, Inc. (“JapanBridge”), a specialty pharmaceutical company with operations in Tokyo founded in 2006 by MPM Capital and Itochu Corporation (“Itochu”), announced today that it has entered into a strategic alliance with Kyowa Hakko Kogyo Co., Ltd. (“Kyowa Hakko”) (TOKYO:4151), a major Japanese pharmaceutical company, to collaborate on the commercialization of oncology and oncology supportive care assets in Japan.

“becoming a Highly Profitable Corporate Group achieving over 100 billion Yen in consolidated net income in a steady and sustainable manner.”

Separately, JapanBridge announced the completion of a $6.5 million Series A-2 preferred financing provided by MPM Capital, Itochu, and Kyowa Hakko. The company was founded in 2006 by Dr. Bard Geesaman, Venture Partner at MPM Capital, John McDonald, Venture Partner at MPM Capital, and Koji Shinozaki, Innovative Technology Business Development Office, Itochu, with seed capital from MPM Capital and Itochu. The A-2 funds will be used to build the business infrastructure in Japan and identify 2-4 oncology drugs for licensing into Japan. JapanBridge intends to complete the clinical development of these programs and later commercialize or co-commercialize these products.

The company also announced the formation of its core management team, led by Steven E. Engen, Chief Executive Officer. Mr. Engen was formerly President of Mundipharma K.K., a company which he established and built to an operation of 70 staff in Tokyo and Osaka. He has over 9 years experience working in the Japanese pharmaceutical environment. In addition, Yoshihiro Arai has joined JapanBridge as Executive Vice President of Development, with responsibility for all clinical and regulatory aspects of JapanBridge. Mr. Arai spent 14 years at Amgen K.K. where he held numerous senior level clinical development positions.

“Primarily because of the lack of available capital, the successful specialty pharma model of the U.S. and Europe has not evolved to respond to the changing regulatory and commercial environment in Japan. Through strong relationships with MPM Capital, Itochu, Kyowa Hakko and other venture capital investors, JapanBridge will be strategically positioned to take advantage of these changes. Our team is uniquely qualified to work with Western biotech companies to secure approvals for drugs that might not otherwise be brought to the Japanese market,” noted Steven Engen, JapanBridge CEO.

“Historically, the approval of important new therapies in Japan has lagged the U.S. and Europe by 5-10 years. Due to the recent changes in Japan’s regulatory environment, JapanBridge expects to successfully expedite and introduce breakthrough oncology drugs in Japan thereby improving outcomes for Japanese cancer patients.”

Kyowa Hakko has committed to assist JapanBridge in performing due diligence on oncology assets and support the clinical and regulatory strategy guidance. For each oncology asset in-licensed by JapanBridge, Kyowa Hakko has an option to co-fund, co-develop and co-commercialize the asset.

Hiroo Inoue, Managing Executive Officer of Itochu, stated, “JapanBridge represents a unique opportunity. JapanBridge can leverage MPM Capital’s experience building bioventures, while at the same time using Kyowa Hakko’s support to better understand the local regulatory, development and commercial environment in Japan. In addition, Itochu will be able to provide support to JapanBridge through its own infrastructure, including contract research organization (CRO) and contract sales organization (CSO) services. JapanBridge represents the first bioventure of its kind in Japan. Itochu is excited to be part of such an organization.”

JapanBridge will initially source late-stage assets from MPM Capital’s extensive network in the Western biotech and global pharmaceutical communities. Dr. Ansbert Gadicke, General Partner of MPM Capital and Chairman of JapanBridge stated, “In addition to new drugs, supportive cancer products represent late-stage and low clinical risk assets that are appropriate for JapanBridge. Given MPM’s extensive network of innovative biotechnology companies and relationships with leading pharmaceutical companies, we represent a rich source from which high value assets can be identified for licensing by JapanBridge. Furthermore, we believe that our investments continue to address productivity issues in the pharmaceutical industry. Consistent with past successes, JapanBridge is a novel new solution that has the potential to provide a significant return to its shareholders. To optimize the outcome in a new area, in this case a specialty pharma based on in-licensing Western drugs, we believe that an organization should be built from scratch, including management, capitalization, and asset selection. With JapanBridge, we are confident that we have the right combination of those three requirements.”

In November 2006, JapanBridge announced a $1.3 million seed funding. The seed funding was used to survey the Japanese drug development and commercialization environment, to make key management hires, and to secure office space.

With the most recent fund-raising, JapanBridge expects to identify, license, and formulate a development commercialization strategy for up to four pharmaceutical assets. Once the portfolio is acquired and a development strategy for each is formulated, JapanBridge expects to expand operations to enable commercial launch of the products. According to Mr. Engen, JapanBridge will keep head count at a minimum leveraging CROs and a network of clinical and regulatory consultants until such time as a commercial operation is needed for product marketing and launch.

About MPM Capital:

MPM Capital is the world's largest dedicated investor in life sciences. With committed capital under management in excess of $2.5 billion, MPM Capital is uniquely structured to invest globally in healthcare innovation. In addition to its MPM BioVentures family of venture capital funds, MPM Capital invests in the public markets through its MPM BioEquities hedge fund. Primarily in biotechnology and biopharmaceuticals, but also in medical devices, MPM Capital has seamlessly integrated its private and public platforms to focus on innovation in healthcare and, thereby, delivering exceptional returns to investors. MPM Capital is the manager of the MPM BioVentures and MPM BioEquities family of funds - two distinctly different but highly complementary investment platforms.

About Kyowa Hakko:

Kyowa Hakko is an R&D-based company with special strengths in biotechnology. Kyowa Hakko is dedicated to the creation of new value in the life sciences, especially in its core business segments of Pharmaceuticals and Bio-Chemicals, and strives to contribute to the health and well-being of people around the world. In Pharmaceuticals, since contributing to the eradication of tuberculosis in Japan with the introduction of streptomycin and developing Mitomycin C, now a leading cancer chemotherapy agent, Kyowa Hakko has actively engaged in the R&D, production, and sale of pharmaceuticals that address needs in such areas as cancer, allergies, and hypertension.

About ITOCHU Corporation:

The history of ITOCHU Corporation dates back to 1858 when the Company’s founder Chubei Itoh commenced linen trading operations. Since then, ITOCHU has evolved and grown over 150 years into a sogo shosha, engaging in domestic trading, import/export, and overseas trading of various products such as textiles, machinery, information and communications-related products, metals, products related to oil and other energy sources, general merchandise, chemicals, and provisions and food. In addition, ITOCHU has made multifaceted investments in insurance agencies, finance, construction, real estate trading, and warehousing as well as operations and businesses incidental or related to those fields. Under the former mid-term management plan “Frontier-2006,” ITOCHU reached its objective of “becoming a Highly Profitable Corporate Group achieving over 100 billion Yen in consolidated net income in a steady and sustainable manner.” ITOCHU will now move forward with the implementation of our new mid-term management plan, “Frontier+2008,” under which we will adopt an even more aggressive management policy and strive to enhance corporate value on the world stage, in order to become “a Global Enterprise that is highly attractive to all stakeholders.”