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Sep 5, 2013

Otsuka Acquires Astex for $866M

  • Otsuka Pharmaceutical said today it will acquire Astex Pharmaceuticals for $866 million in a deal the buyer said will strengthen its R&D efforts for central nervous system diseases and other disorders as well as speed up its drug development by applying Astex’ fragment-based Pyramid™ drug discovery technology.

    The deal will help Otsuka broaden its offerings shortly before patent protection for the oral version of its top-selling drug, the schizophrenia treatment Abilify (OPC-14597) co-marketed with Bristol-Myers Squibb, expires in 2015.

    Otsuka also said the acquisition will strengthen its portfolio of drug candidates and treatments for cancer. The company's product roster includes ABI-007 (abraxane), a Celegene-originated compound approved in Japan for non-small cell lung cancer (NSCLC) and gastric cancer; OVF (fentanyl citrate), originating with Teva Pharmaceutical Industries and approved in Japan for cancer-related pain; and S-1, an experimental oral drug originating with Taiho Pharmaceutical that is now in Phase III trials in the United States for gastric cancer.

    "I would like Otsuka Pharmaceutical to continue to respect Astex' uniqueness and leverage it to bring further growth for Otsuka Pharmaceutical," Taro Iwamoto, Ph.D., Otsuka’s president and representative director, said in a statement. "Astex' unique fragment-based drug discovery technology and clinical oncology research and development capabilities, born out of the passion of its researchers, exemplify our corporate mottos and belief in 'Sozosei (Creativity) and Jissho (Proof through Execution).'"

    Astex’ Pyramid technology evaluates binding of target proteins with small molecules via 3D structural analysis—a process the company says enables quicker discovery and development of compounds for target proteins implicated in diseases than possible with high-throughput screening.

    Astex developed and launched Dacogen® (decitabine), indicated for myelodysplastic syndromes and elderly acute myeloid leukemia. Dacogen, now marketed by Eisai in North America and by Janssen elsewhere, generates about $280 million in worldwide annual sales. Last month Astex reported promising results for a Phase II trial of its experimental compound SGI-110 for acute myeloid leukemia and myelodysplastic syndrome.

    Over the past eight years, Astex has advanced eight oncology and the central nervous system compounds to clinical R&D stages. Four of these are in Phase II clinical trials, including SGI-110, a DNA methylation inhibitor, and AT13387, an inhibitor of heat shock protein 90 (HSP90). Both SGI-110 and AT13387 are involved in reproduction of cancer cells. Another four experimental compounds are in Phase I trials.

    Established in 1991, Astex maintains a fragment-based drug discovery research center in Cambridge, UK, and a clinical research and development function in California.

    Otsuka operates in 25 countries and regions worldwide, with consolidated annual sales of about $13 billion from its pharmaceutical and neutraceutical products. Otsuka group chairman Akihiko Otsuka represents the third generation of family leadership for the company, which traces its origins to 1921.

    Otsuka said it will pay $8.50 per share for all outstanding common shares of Astex—a 48% premium to the previous 30-day average closing stock price.


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