Astellas Pharma will acquire Ocata Therapeutics for $379 million, the companies said today, in a deal that will create a presence for the buyer in ophthalmology and cell therapy.

Ocata—which changed its name last year from Advanced Cell Technology—focuses on regenerative medicine and cell therapy technologies for eye diseases.

The company says its approach, which it calls “regenerative ophthalmology,” identifies cell types that are compromised or lost due to disease, then replaces those missing cells with the same cell generated from a stem cell source. Ocata has built an IP portfolio and carried out R&D based on pluripotent stem cell platforms—both human embryonic stem cell (hESC) and induced pluripotent stem cell (iPSC)—as well as other cell therapy research programs.

Ocata’s most advanced products are a pair of Phase II retinal pigment epithelium (RPE) cell therapies, one for Stargardt’s disease and the other, for dry age-related macular degeneration (AMD). Ocata also has an RPE cell therapy for myopic macular degeneration that has advanced into Phase I.

In addition, Ocata has photoreceptor progenitor therapies in preclinical phases for Stargardt’s and dry AMD, as well as for retinis pigmentosa. The company’s other therapies include a preclinical retinal ganglion progenitor therapy against glaucoma, and a discovery-phase corneal endothelial therapy.

“We highly value Ocata's R&D capabilities, including its world-leading researchers in cell therapy,” Astellas president and CEO Yoshihiko Hatanaka said in a statement. “We're confident that we will turn innovative science into value for patients through the creation of new value by combining both companies' capabilities under 'One Astellas,' where Ocata will be taking a key role in Astellas' R&D in ophthalmology and cell therapy.”

“One Astellas” is the pharma giant’s business philosophy paradigm that calls for consistent global initiatives worldwide. One Astellas is intended to advance five core values or “messages”: Contributing to improving patient health, embracing change by taking ownership, committing to results, promoting diversity and open communication, and acting with integrity.

Astellas added that the deal also represents a step toward achieving its Strategic Plan 2015-2017. Announced in May, the plan called in part for creating new drugs in therapeutic areas such as ophthalmology and muscle diseases; and using new technologies to develop cell therapies and next-generation vaccines. Astellas is scrambling to overcome the loss of patent protection between 2018-2020 for overactive bladder treatment VESIcare® (solifenacin succinate) and Tarceva® (erlotinib), which is co-marketed with Genentech and carries indications for non-small cell lung cancer and pancreatic cancer.

“I am impressed by the vision and commitment of Astellas and believe that with their global resources behind our regenerative platform, patients suffering from debilitating diseases like AMD and SMD [Stargardt macular degeneration] will soon benefit from having access to regenerative medicine,” added Paul Wotton, Ph.D., Ocata’s president and CEO.

The companies said the deal is expected to have a “minor impact” on Astellas' financial results for its current fiscal year, which ends March 31, 2016.

The boards of directors of both Astellas and Ocata have unanimously approved the deal, which is subject to customary closing conditions, including antitrust approvals and the tender of a majority of Ocata's shares of common stock on a fully diluted basis.

Astellas will acquire Ocata through a wholly owned subsidiary of its U.S. holding company, Laurel Acquisition. Laurel will begin a tender offer for all outstanding shares of Ocata common stock at $8.50 per share cash—a 79% premium over Ocata's closing share price of $4.75 on November 6.

The tender offer period is expected to begin no later than November 25, and will expire in 20 business days, unless otherwise extended. If tender offer conditions are not satisfied, Astellas may be required to extend the period—but added it is not obligated to do so past May 9, 2016.

Upon successful completion of the tender offer, Laurel will be merged into Ocata, and any remaining shares of the acquired company’s common stock will be canceled and converted into the right to receive the offer price—except for shares held by stockholders demanding appraisal rights under Delaware law. Ocata’s board has agreed to recommend that company stockholders accept the offer.

Each of Ocata’s directors and executive officers have agreed to tender their shares of the company’s common stock. Those shares represent a total approximately 1.7% of outstanding Ocata common stock, the companies said.

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