Patent cliff ahead: Otsuka to buy Avanir for $3.5B and a slate of new products
- Japan-based Otsuka is buying US-based Avanir Pharmaceuticals for $3.5 billion.
- One of the main objectives of this acquisition is for Otsuka to shore up its portfolio with new products in preparation for patent expiry of Abilify (aripiprazole)—the top-selling drug of 2013, according to IMS Health, with sales of almost $6.5 billion.
- The $3.5 billion acquisition price translates to $17 per share for Avanir—a 13.3% premium compared with Monday's closing price.
Having foresight and taking action are key characteristics of a company that can continue to successfully grow and evolve. Otsuka's upcoming acquisition of Avanir in early 2015 represents such foresight. Although Abilify will lose patent protection, Otsuka is taking steps to strenthen its neurology franchise through the Avanir purchase.
One of the most important drugs in Avanir's portfolio is Nuedextra (dextromethorphan/quinidine), the only approved treatment for psuedobulbar affect (PBA)—a neurologic disorder in which the affected person laughs or cries uncontrollably. In addition, Avanir also has a robust pipeline of neurologic drugs in various stages of development.