Japan’s Astellas Pharma has signed an agreement to acquire German-based biopharmaceutical company Ganymed Pharmaceuticals for €1.2bn.

With this transaction, Astellas will be able to continue to build upon its oncology franchise as a platform for sustainable growth.

Astellas Pharma president and CEO Yoshihiko Hatanaka said: “Oncology is one of our focus therapeutic areas and key drivers for our growth.

“The acquisition of Ganymed will enable Astellas to further expand our oncology presence by adding a late-stage antibody asset with the potential to establish a new pillar following Xtandi.”

Under the agreement, Astellas will initially pay €422m to acquire 100% stake in Ganymed and Ganymed’s shareholders will subsequently receive up to €860m based on progress in the IMAB362 clinical programme development.

Subject to customary regulatory approvals, the transaction is set to be finalised soon. Once the deal closes, Ganymed will become a wholly owned subsidiary of Astellas.

Ganymed Pharmaceuticals CEO and co-founder Dr Özlem Türeci said: “I am impressed by the competence, commitment and vision of Astellas.

“Recognising their global resources, I am also confident that Astellas will be able to turn innovative science and promising clinical results into near-term value for patients.”

Ganymed focuses on the development of a new class of cancer drugs and has several oncology pipeline assets in pre-clinical and clinical stages, including the new investigational antibody drug IMAB362.

The drug is specific for the tight junction protein Claudin18.2, which is expressed in various high medical need cancers and has received orphan drug designation in the US and Europe for gastric and pancreatic cancer.