Otsuka to Acquire Avanir Pharmaceuticals for $3.5 Billion

Otsuka Pharmaceutical Co., Ltd. has agreed to acquire Avanir Pharmaceuticals, Inc. a biopharmaceutical company headquartered in Aliso Viejo, California, for $3.539 billion. The deal is an all-cash tender offer to be followed by a second-step merger to be made through a wholly owned subsidiary of Otsuka America, Inc.

Avanir is a biopharmaceutical company specializing in central nervous system (CNS) diseases. It was founded in 1988 in Southern California and now employs approximately 500 people. Avanir’s lead product is Nuedexta (dextromethorphan hydrobromide/quinidine sulfate) 20 mg/10 mg capsules, which was launched in the US in February 2011 for treating the neurologic disease pseudobulbar affect (PBA). Sales of Nuedexta in the twelve-month period from July 2013 through June 2014 were $94 million. The company's pipeline includes programs in Alzheimer's disease, Parkinson's disease, migraine, and other CNS indications. The company’s lead new chemical entity in its pipeline is AVP-786, which is being prepared to enter Phase III clinical trials with a target indication for agitation associated with Alzheimer's disease. Avanir's clinical development and commercial expertise in neurologic diseases complements Otsuka Pharmaceutical's capabilities in psychiatric diseases and is intended to accelerate Otsuka Pharmaceutical's existing expansion strategy in the neurologic area, widening its overall CNS portfolio, inclusive of the psychiatric and neurologic areas, to support short-and medium-term growth.

For purposes of the transaction, Otsuka has established an acquisition vehicle, Bigarade Corporation (“Acquisition Sub”), as an Otsuka America's wholly owned subsidiary. After the tender offer has concluded, Acquisition Sub will merge with and into Avanir, and Avanir will become Otsuka America's direct wholly owned subsidiary and an indirect wholly owned subsidiary of Otsuka Pharmaceutical.

Source: Otsuka Pharmaceutical

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