Japan’s Otsuka Holdings to pay $886 mn for cancer drug maker Astex Pharma

Japanese drugmaker Otsuka Holdings Co has offered to pay $886 million for US cancer drug maker Astex Pharmaceuticals Inc.

Otsuka will pay $8.50 a share for California-based Astex, a 27-per cent premium to the company's closing stock price on 3 September, the day before Japanese newspaper Nikkei reported about the deal.

But analysts immediately said that the offer was too low and Astex should hold on to at least $13 a share.

Astex had recently started the sale process after a five-year internal review and hired Jefferies as the financial adviser.

Astex, earlier called Astex Therapeutics, was founded in 1999 by Dr Harren Jhoti, a former head of Structural Biology and Bioinformatics at GlaxoWellcome, and two Cambridge academics, Prof Sir Tom Blundell and Prof Chris Abell.

Astex is a leader in innovative small-molecule therapeutics with particular expertise in fragment-based drug discovery, the most important advance in discovery chemistry in the last 20 years. Its primary focus is on oncology and hematology.

Astex has built myelodysplastic syndromes (MDS) franchise with Dacogen for Injection, which has been recently approved in Europe for the treatment of acute myeloid leukemia in patients over 65 years.

Astex's lead clinical development candidates are SGI-110, a novel and subcutaneous hypomethylating agent, which is being evaluated in multiple clinical studies for a variety of hematological and solid tumor oncology indications, including MDS, AML, ovarian cancer and liver cancer, and AT13387, a novel, second generation HSP90 inhibitor being evaluated in clinical studies in the treatment of prostate and lung cancers.

Astex also has five partner-funded programs that are being developed by Novartis, AstraZeneca, Janssen and through a clinical development partnership with Cancer Research (UK).

"We believe that Otsuka's financial resources and development expertise will enhance Astex's ability to build further its oncology portfolio, pipeline, and discovery prowess," said James Manuso, PhD, chairman and CEO of Astex.

"This transaction recognizes the meaningful assets our employees have created. Most importantly, however, patients will benefit substantially from the larger drug discovery, development and commercialization platform a combined Otsuka and Astex will deliver."

Dr. Taro Iwamoto, Otsuka's president and representative director, said, "I hope that this acquisition of Astex will strengthen not only our cancer portfolio but also our drug discovery research in the central nervous system field, through the acquisition of Astex's fragment-based drug design technology at its Cambridge, England research headquarters and its California clinical oncology R&D department.''

Founded in 1964, Otsuka conducts research and development of highly-innovative drugs and diagnostics.

The Tokyo-based company researches, develops, manufactures and markets innovative and original products, with a focus on the treatment of diseases and consumer products for the maintenance of everyday health.

Otsuka operates in 26 countries and regions around the world, and had 2012 revenues of $12.2 billion.