Japan’s Astellas Pharma is boosting its presence in the USA and specifically in antibody research by acquiring Agensys in a deal that could be worth up to $537 million.

Under the terms of the deal, Astellas is paying $387 million upfront, plus a maximum of $150 million more, depending on “Agensys' achievement of various milestones. The transaction is expected to close by the end of the year.

The reason why Astellas has plumped for the Santa Monica-based firm formerly known as UroGenesys is the latter’s expertise in therapeutic antibody research, specifically in cancer. Agensys has identified 30 proprietary targets across 14 different types of cancer and it can generate fully human monoclonal antibodies using the firm's XenoMouse technology, licensed-in from Abgenix (now part of Amgen). Also included in the deal is Agensys’ GMP manufacturing facility, which produces antibodies for Phase I and early Phase II trials. The company’s lead product AGS-PSCA, an antibody that targets prostate stem cell antigen and is in Phase Ib.

Astellas has already made an effort to boost its R&D capabilities in antibodies, having acquired a non-exclusive license to Regeneron's VelocImmune technology and bought access to a phage display library from Germany’s MorphoSys. Both of those deals were signed in March this year.

Astellas chief executive Masafumi Nogimori said that his firm is looking to be “a strong global pharmaceutical leader” and "Agensys will be the cornerstone of our biologics efforts,” adding that the acquired company will be “an integral component of building our oncology efforts within our franchise".

The Japanese firm has been looking to expand further internationally for some time and clearly sees antibody research into cancer as a good long-term bet. It noted that the global market for cancer drugs will double to 3.4 trillion yen (or around $31 billion) by 2015, from 1.7 trillion yen in 2005, Astellas estimates.

However the fruits the Tokyo-headquartered firm may obtain from the Agensys purchase will not ripen soon enough to fill the gap that will be left once the US patent on the immunosuppressant Prograf (tacrolimus), its best-selling product, expires next year.