Sankyo yesterday snapped up the rights to a new diabetes drug from fellow Japanese firm Ajinomoto, triggering an upfront payment of 4.6 billion yen ($392 million). The Phase I compound, dubbed AJD101, works on a “completely new mechanism of action,” by activating the insulin-signalling pathway to stimulate the uptake of glucose.

In animal models of diabetes, AJD101 has shown glucose lowering ability after oral administration, but the companies are also hoping to demonstrate it can help prevent the progressive deterioration of pancreatic function – which produces insulin - that otherwise characterises this disease.

Sankyo has bought itself exclusive rights to AJD101’s development, manufacture and marketing – as well as similar offerings in Ajinomoto’s pot – although the latter will still have a hand in manufacturing a portion of the drug line and link up with Sankyo at certain points along the development pathway. As well as the 4.6 billion yen fee, Sankyo will also fork out milestone payments and royalties on sales.

The company is hoping to tap into a rapidly growing market for diabetes. The International Diabetes Federation estimates the number of diabetic patients will jump to 333 million from 194 million globally by 2025 because of our changing lifestyles. The current diabetes market, notes Sankyo, is worth 1.5 trillion yen and could jump to 2 trillion yen by 2010.