Otsuka buys Avanir for $3.5 billion
pharmafile | December 3, 2014 | News story | Sales and Marketing | Abilify, Alzheimer's, Alzheimer’s, Nuedexta, Otsuka, Parkinson's, Parkinson’s, avanir
Otsuka is to buy Avanir Pharmaceuticals for $3.5 billion as it looks to make up for the imminent patent expiry of its top-selling drug.
US-based Avanir has programmes in Alzheimer’s disease, Parkinson’s disease, migraine, and other CNS indications in its pipeline that would have been attractive to Otsuka.
In a statement Otsuka says that these areas of expertise “complement Otsuka’s capabilities in psychiatric diseases” and will help “accelerate Otsuka’s existing expansion strategy in the neurologic area”.
The main draw for the Japanese firm, though, is Avanir’s Nuedexta (dextromethorphan hydrobromide/quinidine sulphate), which became the world’s first treatment for the neurologic disease pseudobulbar affect (PBA) when it was approved by the FDA in 2011.
Nuedexta had sales of $94 million between July 2013 and June 2014, a 50% increase over the previous year.
Otsuka’s president and representative director Taro Iwamoto, says: “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.”
PBA is a neurologic condition characterised by sudden and uncontrollable laughing or crying outbursts that are often contrary to the patient’s inner mood state. This can lead to impairments in social function as well as social isolation.
One of Avanir’s other more promising compounds is AVP-786, for the treatment of agitation associated with Alzheimer’s disease, which is about to enter Phase III trials.
The firm recently faced rejection from the FDA, however, after the regulator raised questions about errors in the trial data for its migraine drug device AVP-825.
Abilify patent expiry
The acquisition comes less than six months before the US patent for Otsuka’s blockbuster antipsychotic Abilify (aripiprazole) expires. Abilify had global sales of $5 billion in the last fiscal year, which accounted for around 40% of Otsuka’s total sales.
The company is also hoping that it can find a successor to Abilify among its own pipeline in brexpiprazole – a schizophrenia and major depression (MDD) drug co-developed with Lundbeck that is currently under review by the FDA.
Analysts at EP Vantage say of the move: “The only way Otsuka’s buyout of Avanir Pharmaceuticals makes sense is as a big gamble on degenerative diseases.
“The steep price ought to have Otsuka investors shaking their heads, as the valuation relies on continued clinical success of Nuedexta in Alzheimer’s disease agitation, an indication whose regulatory pathway will likely be little easier than the currently approved pseudobulbar affect.”
They go on to say that Otsuka shows that there still are ‘companies with open chequebooks’.
George Underwood
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