- Looking to build out its drug development prowess, Otsuka Pharmaceutical is acquiring private biotech Visterra and its antibody technology for roughly $430 million in cash.
- The deal hands Otsuka a slate of preclinical compounds for a variety of diseases, from immunoglobulin A nephropathy to chronic pain, as well as access to Visterra's Hierotope platform. The platform creates biological drugs that target epitopes, with the focus being on those with more complex amino acid networks. Epitopes are the region on an antigen where an antibody binds.
- Boards of directors for both companies have already approved the transaction, which — if all goes according to plan — should close in the third quarter.
Much of Otsuka's recent M&A activity has focused on individual drugs. In late 2016, the Japanese pharma inked a deal potentially worth more than $1 billion that centered on developing and commercializing an anemia drug from Akebia Therapeutics.
Since then, Otsuka dropped another $100 million to acquire Neurovance and its Phase 3-ready candidate for attention-deficit hyperactivity disorder, and later agreed to a $50 million lump sum payment plus milestones for Japanese rights to Teva's closely watched migraine treatment fremanezumab.
But Otsuka also has sights set on beefing up its in-house development capabilities.
"The company is placing emphasis on proprietary drug discovery and development platforms, including antibody development platforms, as a means to increase the efficiency of drug discovery across its programs and as an addition to conventional R&D processes," Otsuka said in a July 11 statement.
Snagging Visterra appears to be the latest step in that direction. The biotech's technology hasn't attracted only Otsuka's attention either — in October, Vir Biotechnology linked up with Visterra in an R&D and licensing agreement that offered more than $1 billion in potential payments. The pact centered on advancing and commercializing infectious diseases candidates using the Heirotope platform.
Visterra's takeout also comes at a somewhat hefty price tag and will eat away at Otsuka's reserves of cash and cash equivalents, which totaled ¥313 trillion (about $2.8 billion) by the end of March. The companies, though, see the acquisition as a good fit for a number of reasons, including their overlapping therapeutic focuses.
"Joining forces with Otsuka will provide Visterra the resources, support and commitment to accelerate development of our pipeline and fully realize the potential of our technology platform," Visterra CEO Brian Pereira said in the July 11 statement.