TOKYO (AP) -- Japanese drug maker Daiichi Sankyo Co. is acquiring California pharmaceutical company Plexxikon Inc. for $935 million, with eyes on a still developing cancer treatment, both sides said Tuesday.
Daiichi Sankyo is interested in Plexxikon's PLX4032 drug, as well as its potential to develop drugs for rheumatoid arthritis and other diseases, said company spokesman Masaya Tamae.
Tokyo-based Daiichi, Japan's No. 2 pharmaceutical company, is paying $805 million for Plexxikon, and will pay another $130 million when PLX4032, its code-name, is approved as a commercial drug, he said.
It is believed to be effective in treating metastatic melanoma, a kind of skin cancer. Tamae said an application for the drug will be filed within this year, and approval could come relatively soon.
Chief Executive Joji Nakayama said the deal, pending antitrust regulatory approval, is part of long-term ambitions to provide world-class drugs.
Plexxikon, based in Berkeley, California, was set up in 2001, and employs about 45 people.
Japan's economy has been sluggish in between spurts of moderate growth.
Hopes are high that moves like Daiichi's will spur new growth amid worries that old-style manufacturing, long the lifeblood of this nation, may be losing ground to rivals from emerging economies.
The strong yen, a big negative for the Japanese manufacturers because it tends to make their exports more expensive, work as a plus for overseas acquisitions.