Takeda Pharmaceutical Co., Japan's largest drugmaker, agreed to buy the local unit of Amgen Inc., gaining cancer and arthritis medicines.
The financial terms include an upfront cash payment to Amgen of $200 million, the companies said in a statement Monday.
Takeda will also pay to Amgen as much as $340 million in development costs over the next several years, $362 million in success-based milestone payments, and at least 10 percent in royalties on sales in Japan.
Amgen K.K. widens the pipeline of drugs Takeda is developing to buffer a drop in sales once Actos, its best-selling diabetes pill, faces competition from generics in 2011.
For Amgen, the world's biggest biotechnology company, the sale is part of global cost cuts to offset a slump in revenue and a drop in profit growth.
The Thousand Oaks, Calif.-based company asked for bids for Amgen K.K. during negotiations with Japanese drugmakers last year.
The Tokyo-based unit develops products including biotechnology-based treatments for diseases such as cancer, rheumatoid arthritis and asthma.
Amgen's 2007 earnings forecast was cut at least three times last year after studies showed the anemia drugs Epogen and Aranesp raised the risk of heart attack and death in high doses.
Sales of Aranesp, the company's biggest product, with $3.61 billion in sales in 2007, fell 26 percent in the fourth quarter.
Amgen said in August it planned to cut as many as 2,600 jobs and slash capital spending by $1 billion.