Otsuka acquires Avanir in $3.5 billion deal
Japanese drug maker Otsuka Holdings has agreed to buy Avanir Pharmaceuticals as part of a multi-billion dollar deal that could ease its potential patent woes.
Announced today (December 2), the $3.5 billion deal will see Otsuka expand its drug portfolio just months before one of its key patents covering schizophrenia drug Abilify (aripiprazole) is set to expire. The patent expires in April, when the drug could become open to generic competition.
When a company’s patent expires and there is a resulting drop in sales, it is referred to as a “patent cliff”.
Sales for Abilify totalled 575.7 billion yen ($5 billion) in the last financial year.
Taro Iwamoto, president of Otsuka, said the company’s experience and business record in the area of mental illnesses—along with Avanir's strengths in the neurologic diseases field—could turn Otsuka into a “truly global” pharmaceutical company focusing on central nervous system products.
“We admire and respect Avanir's innovation, vision, and execution and want to continue to grow together," Iwamoto said.
Keith Katkin, chief executive at Avanir, added: "I am extremely excited to see these two organisations come together. Our organisations will be able to more rapidly develop and commercialise needed medications for patients around the world."
Avanir will continue to operate under its current structure but as an independent subsidiary of Otsuka.
The deal is expected to be completed in the first quarter of 2015.
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