Japan's Astellas Pharma Agrees To Acquire Iveric Bio For $5.9 billion

Astellas Pharma of Japan announced on Monday that it has agreed to buy Iveric Bio Inc of the United States for approximately $5.9 billion in its largest acquisition to date, giving it access to a variety of ophthalmology treatments. Astellas, Japan's third-largest drugmaker by sales, has made its fifth major overseas acquisition since 2019 in an effort to shore up its pipeline as its main sellers lose patent protection. According to Astellas, the Japanese company agreed to acquire Iveric for $40 per share in cash through Berry Merger Sub Inc, a wholly-owned subsidiary of Astellas U.S. Holding.

The price is a 22% premium to Iveric's closing price of $32.89 on April 28. Iveric, formerly known as Ophthotech, is based in New Jersey and focuses on developing treatments for retinal diseases. The company's main asset is avacincaptad pegol (ACP), which is currently being tested for the treatment of geographic atrophy, the advanced stage of macular degeneration and a common cause of vision loss in the elderly. ACP, marketed as Zimura, targets the C5 protein, which is thought to be responsible for the disease's scarring. The US Food and Drug Administration granted ACP priority review in February, and if approved, the treatment could be available by the end of this year. Astellas is counting on ACP, along with treatments for menopause symptoms and bladder cancer, to compensate for the loss of sales exclusivity for its mainstay prostate cancer drug Xtandi, said chief executive Naoki Okamura at a press conference.

"We believe this will be the third pillar," said Okamura, who took over as president last month. Astellas has been aggressively pursuing acquisitions, announcing deals in late 2019 to purchase US biotech Xyphos Biosciences for up to $665 million and Audentes Therapeutics Inc for approximately $3 billion. Its acquisition track record has been mixed, as the company had to book significant impairments on Audentes. "This deal, on the other hand, is primarily about a soon-to-be approved asset and appears less likely to generate impairment losses," Jefferies analysts wrote in a note on the Iveric acquisition. Astellas will fund the Iveric purchase via short-term loans and commercial paper amounting to about 800 billion yen ($5.8 billion). Astellas shares gained 1.8 per cent in Tokyo trading, outperforming a 0.7 per cent advance in the benchmark Nikkei gauge. ($1 = 136.8700 yen)