Transaction Case Studies

Sell-Side Engagement for Ascentage Pharma Leading to an Option Agreement with Takeda for $100M Upfront, $75M Equity Investment, and $1.2B in Milestone Payments plus Royalties on Net Sales

 

Situation Assessment

  • Ascentage Pharma (6855.HK) is a Chinese biopharmaceutical company focused on identifying, developing and commercializing novel treatments in hematological diseases
  • Ascentage’s lead product, olverembatinib, is a BCR-ABL Tyrosine Kinase Inhibitor (TKI) approved in China for TKI-resistant CML and is in global Phase 3 studies in CML and Ph+ ALL
  • Ascentage was interested in maximizing deal value and had already been in discussions with Takeda and engaged Locust Walk in Jan 2024 to run a process to generate competitive tension and support the deal negotiations

Key Activities

  • Developed marketing materials and conducted an outreach process to a select group of potential strategic pharma partners
  • Offered strategic advice and senior-level connectivity that improved deal valuation and structure
  • Worked as an extension of the Ascentage business development team to provide quantitative and qualitative research and analysis to support deal negotiations
  • Facilitated due diligence process across functional areas
  • Engaged in negotiations of the term sheets and deal documents identifying key business terms that were essential to a successful deal
  • Worked in collaboration with legal and business development teams to drive the transaction on an accelerated timeline to a successful close

Successful Outcome

  • Drove deal to a close on a rapid timeline, Locust Walk started the engagement in January 2024 and deal closed in under five months
  • Negotiated favorable deal terms, resulting in a $75M equity investment that was not included in the previous bid and increased downstream value
  • Secured additional cash for Ascentage to fully support its extensive development plan and R&D spend for the program, which was covered by deal terms

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