Business / Corporate

Otsuka to buy U.S. biopharmaceutical firm Avanir for $3.5 billion to expand into neurology

Kyodo

Otsuka Pharmaceutical Co. said Tuesday it will acquire California-based biopharmaceutical firm Avanir Pharmaceuticals Inc. for $3.54 billion in an attempt to accelerate expansion in the area of neurology.

The Japanese nutrition product and drug manufacturer, owned by Otsuka Holdings Co., will pay $17 per Avanir share, a 13 percent premium over its Monday closing price, in a tender offer through Otsuka’s U.S. subsidiary.

Tokyo-based Otsuka will then merge Avanir, which specializes in neurological diseases, with Otsuka America Inc. The agreement was reached Monday.

It will be the biggest ever acquisition by Otsuka. The company aims to mostly finance the deal with cash reserves.

Otsuka, a developer of the antipsychotic drug Abilify, appears to be trying to reinforce its product pipeline as it will lose patent protection next year for the widely used drug.

Avanir launched Nuedexta capsules in the United States in 2011, the world’s first and only approved treatment for a neurologic disease called pseudobulbar affect, or PBA, which is characterized by involuntary crying.

It booked $94 million in sales of the drug for the year through June, up 50 percent from the previous year.

Avanir is also developing treatments for Alzheimer’s and Parkinson’s disease.

“There is extremely huge demand” for Avanir’s programs, Otsuka Holdings President Tatsuo Higuchi said at a press conference.

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