To expand its neurologic drug portfolio
Japanese company Otsuka Holdings Co Ltd plans to buy Avanir Pharmaceuticals for approximately US$3.5bn to expand its neurologic drug portfolio.
The deal has been unanimously approved by the boards of directors of both companies and is expected to close in the first quarter of 2015.
Tokyo-based Otsuka said subsidiary Otsuka Pharmaceutical Co would pay $17 a share in cash for Avanir.
Avanir was founded in 1988 in Southern California and now employs approximately 500 people. The company developed and launched Nuedexta (dextromethorphan hydrobromide/quinidine sulfate) 20mg/10mg capsules in the US in February 2011 as the world’s first and only approved treatment for the neurologic disease pseudobulbar affect (PBA). Sales of Nuedexta in the 12-month period from July 2013 to June 2014 were US$94m, a 50% increase over the previous year.
The company markets Nuedexta in the US through its own sales organisation of more than 300 people, 150 of whom were hired to accelerate the continued growth of Nuedexta for PBA.
The company’s pipeline includes programmes in Alzheimer’s disease, Parkinson’s disease, migraine, and other CNS indications.
Avanir's creativity and proven execution on drug discovery and development represents a hand-in-glove fit with Otsuka's culture
Not only will the acquisition of Avanir bring Nuedexta to Otsuka, but it will also add the late-stage investigational compound AVP-786 in clinical development to treat agitation associated with Alzheimer’s disease and Avanir’s clinical development and commercial expertise in neurologic diseases, which complements Otsuka Pharmaceutical’s capabilities in psychiatric diseases.
After the closure of the deal, Avanir will continue to operate under its current structure as an independent subsidiary of Otsuka America, which is headquartered in San Francisco, CA. Avanir will partner with Otsuka in the US to further enhance its development and commercialisation efforts in CNS-related disorders.
Otsuka Pharmaceutical's President and Representative Director Taro Iwamoto said: 'As we bring together Otsuka's experience and business track record in the area of mental illnesses with Avanir's strengths in neurologic diseases, we believe that we can evolve into a truly global CNS pharmaceutical company.
'Avanir's creativity and proven execution on drug discovery and development for largely unexplored medical indications, typified by PBA, represents a hand-in-glove fit with Otsuka's culture.'
Keith Katkin, President and Chief Executive of Avanir Pharmaceuticals, added: 'I am extremely excited to see these two organisations come together. Together, our organisations will be able more rapidly to develop and commercialise needed medications for patients around the world.'