Otsuka Acquires Avanir For $3.5B

Japan-based Otsuka announced the forthcoming acquisition of U.S.-based Avanir in a deal worth $3.5 billion. Otsuka expects the move to broaden their existing portfolio of neurological drugs and broaden their foothold in the U.S. market, Reuters reports.

According to the New York Times (NYT) this purchase follows a recent trend of big pharma acquiring smaller research-focused companies to augment their existing pipelines and offset profit losses from expiring patents.

Abilify, an anti-psychotic drug to treat symptoms of bi-polar disorder and schizophrenia, is Otsuka’s biggest selling drug and represents, according to Reuters, 40 percent of their holdings and possesses a substantial market in the U.S. Otsuka’s patent for Abilify is set to expire in April 2015.

With the acquisition of Avanir, Otsuka takes over the licensing of Nuedexta, a treatment for the pseudobulbar affect (PBA), which is associated with Alzheimer’s and Parkinson’s. Additionally, Avanir is currently testing another treatment, AVP-786, indicated for treatment of agitation associated with Alzheimer’s.

In November, Avanir’s migraine treatment AVP-825 was issued a complete response letter (CRL) and a request from the FDA to submit more “human factor data.” Avanir responded that the issues were “fully addressable” and not the result of any chemical or safety issues with the drug, The Wall Street Journal (WSJ) reports.

These Avanir medications will join Otsuka’s existing pipeline of candidates for the treatment of depression, migraine headaches, and other neurological disorders.

Keith Katkin, president and CEO of Avanir, explained the advantages of the acquisition in a press release. “Together, our organizations will be able to more rapidly develop and commercialize needed medications for patients around the world.”

In the same release, Taro Iwamoto expressed his enthusiasm for Avanir’s creativity and interest in the development of drugs for rare and unexplored medical indications.

Reuters remarked that the licensing of Avanir’s several Alzheimer’s candidates is particularly lucrative and encouraged by Japan’s aging population.

The Alzheimer’s Association reports that there are currently 5 million Alzheimer’s patients living in the U.S. and that number is expected to exponentially increase over the next few decades. Finding successful treatments and therapies for the condition is a global priority.

The final details of the Avanir acquisition are expected within the next 10 days.