Astex Pharmaceuticals, Inc (NASDAQ:ASTX) to be acquired by Otsuka
Japan’s Otsuka has agreed to buy out Astex Pharmaceuticals, Inc (NASDAQ:ASTX) for approximately $886 million. This move is an effort on the part of Otsuka to increase all its revenue streams since the patents for Abilify, its primary drug are set to expire soon. This drug is used to treat schizophrenia. This is not a novel occurrence as large pharma companies that face such patent losses are always on the lookout to acquire smaller companies that have a strong pipeline of drugs which can be used to bolster income.
At the moment, cancer therapy is quite a hot area for any kind of deal making. In a similar move, it was only just last month that Amgen struck the 5th largest biotech deal in history when it agreed to acquire Onyx Pharmaceuticals for $10.4 billion. In recent weeks, there have been other cancer deals as well. AstraZeneca acquired Amplimmune, a privately owned company for almost $500 million.
Increase in acquisitions
The cancer space has been attracting greater investments from various biopharma and biotech companies. This is primarily because there have been a series of breakthroughs in the basic understanding about the base genetics of cancer. This automatically brings on the potential of new medication. In the first 6 months of this year, there was a 30% increase in the healthcare acquisitions and mergers in comparison with the same period in 2012.
On Thursday, Otsuka said that it will be launching the tender offer for Astex Pharmaceuticals, Inc (NASDAQ:ASTX) at $8.50/share. This offer will be sent out within the next ten days. The price that is being offered is a 48% premium to the average closing price of the stock over the last 30 days. ASTX rose 3.39% in Thursday’s trading session. The opening price of the shares was $8.47 which touched an intraday high of $8.56 and closed at $8.55. The company has a market cap of $785.18 million.