Astex Pharma Agrees To Be Acquired By Japan's Otsuka Pharma For $886 Mln Cash

(RTTNews) - Cancer drugmaker Astex Pharmaceuticals, Inc. (ASTX) announced Thursday that it has agreed to be acquired by Japanese drugmaker Otsuka Pharmaceutical Co., Ltd for $8.50 per share, totaling approximately $886 million in cash.

Following media reports about the impending deal, Astex shares surged $1.59 or 23.80 percent on Wednesday and closed at $8.27. In pre-market activity, shares increased $0.18 or 2.18 percent, and traded at $8.45.

The deal has been unanimously approved by the Board of directors of both companies. The per share cash price represents a 48 percent premium to the average closing stock price for the prior 30 day period.

Dublin-based Astex is engaged in the discovery and development of novel small molecule therapeutics with a particular focus on oncology. The company is one of the pioneers of fragment-based drug discovery - an approach that involves the use of relatively small and simple molecules to bind with a target protein in the making of lead compounds.

The company has one marketed drug Dacogen, a cancer medication; two lead clinical development candidates SGI-110, evaluated for a variety of hematological and solid tumor oncology indications, and AT13387, being tested in the treatment of prostate and lung cancers. It has five partner-funded programs that are being developed by Novartis, AstraZeneca, Janssen and through a clinical development partnership with Cancer Research (UK).

Otsuka intends to effect the transaction through a tender offer and expects to close the deal early in the fourth quarter of 2013, subject to the satisfaction of customary closing conditions.

For Otsuka, the latest deal adds to its existing discovery capabilities and pipeline of therapeutic products for neuroscience, cardiovascular, and oncology indications. It also provides Otsuka with Pyramid, the proven, world-class drug discovery platform developed by Astex.

James Manuso, chairman and chief executive officer of Astex, said, "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... Most importantly, however, patients will benefit substantially from the larger drug discovery, development and commercialization platform a combined Otsuka and Astex will deliver."

Taro Iwamoto, Otsuka's President and Representative Director, expects that the acquisition of Astex will strengthen the company's cancer portfolio as well as its drug discovery research in the central nervous system field.

In the transaction, Jefferies LLC is acting as exclusive financial advisor to Astex and Wilson Sonsini Goodrich & Rosati P.C. is serving as its legal counsel. Goldman Sachs is acting as exclusive financial advisor to Otsuka, while Skadden, Arps, Slate, Meagher & Flom LLP is its legal counsel.

In Japan, Otsuka shares closed today's trading at 2,950 yen, down 31 yen or 1.04 percent.