Japanese drugmaker Otsuka Holdings to buy Avanir Pharmaceuticals Inc for $3.5 bn

Japanese drugmaker Otsuka Holdings Co today struck a deal to buy US-based Avanir Pharmaceuticals Inc for about $3.5 billion as part of its plan to fortify its portfolio with treatments for Alzheimer's, Parkinson's and migraines.

The proposed acquisition will be carried out by Otsuka's US subsidiary Otsuka Pharmaceutical Co., Ltd.

Under the deal, Otsuka will pay $17 per share in cash, a premium of 13.3 per cent to Avanir's Monday closing price of $15.

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's US subsidiary Otsuka America, Inc.

Avanir Pharmaceuticals is a biopharmaceutical company focused on development of innovative medicines for central nervous system disorders of high unmet medical need.  It has in the pipeline treatments for Alzheimer's, Parkinson's and migraines.

The company was founded in 1988 as Lidak Pharmaceuticals with a focus on research based human therapeutics. In the mid-1990s it changed its name to Avanir Pharmaceuticals.

The deal will give the Japanese drugmaker access to Nuedexta, a treatment for under-recognized pseudobulbar affect (PBA), and a late-stage investigational compound AVP-786 in clinical development to treat agitation associated with Alzheimer's disease, and Avanir's clinical development in neurologic diseases.

Nuedexta has been approved for the treatment of pseudobulbar affect (PBA), or uncontrollable crying or laughing believed to be caused by neurological conditions such as Alzheimer's, Parkinson's and multiple sclerosis.

AVP-786 treatment for agitation associated with Alzheimerâs disease is being prepared for late-stage clinical trials.

Otsuka Pharmaceutical president, Taro Iwamoto, said, ''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.''

Keith Katkin, president and CEO of Avanir, said, ''Otsuka is a clear leader in psychiatry and Avanir in neurology; together I believe our organisations will be able to more rapidly develop and commercialize needed medications to potentially help millions of patients around the world.''

Tokyo-based Otsuka has business operations in 26 countries and has annual sales of $14.1 billion.