Upon close of the transaction, expected in the first quarter of 2015, Avanir will continue to operate under its current structure as an independent subsidiary of Otsuka America. Avanir will partner with Otsuka in the U.S. to further enhance its development and commercialization efforts in CNS-related disorders.
“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,” said Taro Iwamoto, Otsuka’s president and representative director.
"I am extremely excited to see these two organizations come together,” said Keith A. Katkin, president and CEO of Avanir Pharmaceuticals. “Together, our organizations will be able to more rapidly develop and commercialize needed medications for patients around the world."
Otsuka has a focus on mental health and on several under-addressed diseases including tuberculosis. It has created numerous innovation seeds through its horizontal alliances in the CNS field—with Lundbeck and Bristol-Myers Squibb on psychiatric therapies, and with IBM and Proteus Digital Health on digital solutions for patients, their families, healthcare providers and caregivers.
In CNS, Otsuka introduced Abilify, the first dopamine D2 partial agonist, in the U.S. in 2002 for schizophrenia. With BMS, additional indications were developed including mixed and manic episodes of bipolar I disorder, and as adjunctive treatment of major depressive disorder. In 2011, Otsuka formed an alliance with Lundbeck to broaden CNS activities in Japan, the U.S., Europe and Asia, launching Abilify Maintena, a once-monthly injectable schizophrenia treatment.
Avanir specializes in CNS diseases, launching Nuedexta in the U.S. in 2011 as the first and only approved treatment for neurologic disease pseudobulbar affect (PBA), a condition characterized by sudden and uncontrollable, disruptive laughing and/or crying outbursts often contrary or exaggerated in relation to the patient’s inner mood state. In the U.S., the potential number of patients is estimated at two million.
Avanir’s pipeline includes programs in Alzheimer’s disease, Parkinson’s disease, migraine and other CNS indications. Its new chemical entity AVP-786, targeting agitation associated with Alzheimer’s, is preparing to enter phase III trials.
With this acquisition, Otsuka said it is expanding its therapeutic reach in neurology, including Alzheimer’s-type dementia, MS, Parkinson’s and ALS. Avanir’s clinical development and commercial expertise in neurologic diseases complements Otsuka’s capabilities in psychiatric diseases and will accelerate Otsuka’s existing expansion strategy in neurology.
Otsuka said the acquisition is consistent with its investment philosophy: invest in companies and businesses that share a common management philosophy, human resources, products and technology to enhance corporate value; and invest with long-term perspective.
“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,” said Iwamoto. “We admire and respect Avanir's innovation, vision and execution and want to continue to grow together."
The deal has been approved unanimously by both companies’ boards of directors. Otsuka will launch a tender offer within 10 business days to purchase all outstanding shares of Avanir.
Otsuka employs 28,700 worldwide, and is a wholly owned subsidiary of Otsuka Holdings. Avanir was founded in 1988 and now employs approximately 500.