JAPAN – Astellas Pharma Inc, Japan’s second largest drugmaker by sales has agreed to buy Audentes Therapeutics Inc for about US$3 billion in cash as it seeks to make genetic medicines a key area of growth.
Gene therapies are one of the hottest areas of drug research and Astellas, is offering US$60 per share for San Francisco-based Audentes, a 110% premium to its price in December 2019.
Citi analyst Hidemaru Yamaguchi said that while the deal looked expensive, it was a positive move for Astellas as Audentes had “cutting-edge gene therapy modalities”.
“We thought it was only a matter of time before Astellas entered the gene therapy market, given its licensing of development rights for a domestic gene therapy,” he wrote in a note for clients.
Gene therapies aim to cure diseases by replacing the missing or mutated version of a gene found in a patient’s cells with healthy copies.
With the potential to cure devastating illnesses in a single dose, drugmakers say they justify prices well above US$1 million per patient.
Audentes’ investigational drug, AT132, is being developed to treat a rare genetic neuromuscular disorder, which results in extreme muscle weakness, respiratory failure and in some cases early death.
“Audentes has developed a robust pipeline of promising product candidates which are complementary to our existing pipeline, including its lead program AT132,” Astellas Chief Executive Kenji Yasukawa said in a news release.
The all-cash deal is expected to close in the first quarter of 2020 and is subject to regulatory approval including U.S. antitrust clearance.
Austellas plans to seek FDA approval in mid-2020 for the AT312 drug which has shown promising results in the treatment of X-linked myotubular myopathy (XLMTM) seen mainly in male infants.
Only about 40 boys are born in the U.S. with the condition each year, so that would yield just $80 million in revenue, wrote Jefferies analyst Stephen Barker, assuming a maximum price tag for the treatment.
“The US$3 billion acquisition price is therefore more likely to be mainly predicated on the firm’s technology platform and manufacturing capabilities,” Barker wrote.
Shares in Astellas fell 1.3% on Tuesday in Tokyo, underperforming a 0.6% decline in the broader market N225.
Astellas Pharma Inc. was formed on 1 April 2005 from the merger of Yamanouchi Pharmaceutical Co., Ltd and Fujisawa Pharmaceutical Co., Ltd.
Headquartered are in Tokyo, Astella employs about 17,000 people and is a member of the Mitsubishi UFJ Financial Group.
Astellas’ franchise areas are urology, immunology (transplantation), cardiology, and infectious disease.
It also has priority areas for R&D are infectious diseases, diabetes, gastrointestinal diseases, oncology, and diseases of the central nervous system.