Otsuka Pharma Plunks Down $250 Million for Cambridge Biotech Neurovance for Late-Stage Ready ADHD Drug

TOKYO--(BUSINESS WIRE)--Otsuka Pharmaceutical Co., Ltd. (OPC) today announces an agreement with Neurovance, Inc. (Neurovance) under which OPC has agreed to acquire Neurovance, a privately held, venture-funded, clinical stage pharmaceutical company focused on attention-deficit hyperactivity disorder (ADHD) and related disorders.

Under the terms of the agreement, Otsuka America, Inc. (OAI), a subsidiary of OPC, is to provide an estimated USD $100 million in upfront payments at closing, up to $150 million in additional payments contingent on achievement of development and approval milestones, and future additional payments contingent on achievement of sales milestones. The contract was signed on March 2 (U.S. Eastern Standard Time), and the transaction closing is expected to occur in the second quarter of 2017, subject to customary closing conditions.

Neurovance is developing centanafadine (CTN, formerly EB-1020) for the treatment of attention-deficit hyperactivity disorder in adult and pediatric patients. The company is based in Cambridge, Mass., and was established as a spin-off from Euthymics Bioscience, Inc. in 2011.

Centanafadine is a non-stimulant, triple reuptake inhibitor that modulates norepinephrine, dopamine and serotonin reuptake with the intent of improving focus, attention, and specific higher level cognitive skills in patients with ADHD. Two phase II clinical trials in adults, including a phase IIb trial, have been completed for centanafadine, setting the stage for the start of phase III trials in ADHD.

Tatsuo Higuchi, president and executive director, Otsuka Pharmaceutical Co., Ltd. commented, “Otsuka has been investing prudently in acquiring assets and collaborating on the development of new technologies that address specific patient needs in the central nervous system, cardio-renal and oncology therapeutic areas. Neurovance’s resources will be a welcomed, integral part of our activities in CNS.”

The acquisition of Neurovance is an extension to ADHD of Otsuka’s strategy in the CNS therapy area to develop new products that can also address issues of importance to patients such as compliance with medicine taking or the challenging side effects from existing medications. Centanafadine is a non-stimulant drug candidate which in its development to date has shown that it may achieve comparable efficacy to stimulant drugs with a potentially lower risk of abuse.

Following the consummation of the transaction, Neurovance will be an indirect, wholly-owned subsidiary of Otsuka Pharmaceutical Co., Ltd.

About ADHD

Attention-deficit hyperactivity disorder (ADHD) is a CNS disorder marked by a persistent pattern of inattention and/or hyperactivity-impulsivity that interferes with functioning or development. Some people with ADHD only have problems with one of the behaviors, while others have symptoms of both inattention and hyperactivity-impulsivity. Most children with ADHD have the combined type.

ADHD symptoms often appear in childhood and can continue through adolescence and adulthood. Symptoms of ADHD can be mistaken for emotional or disciplinary problems or missed entirely in quiet, well-behaved children, leading to a delay in diagnosis. Adults with undiagnosed ADHD may have a history of problems at work, difficult or failed relationships, or poor academic performance.

Scientists are not sure what causes ADHD. Like many other illnesses, a number of factors can contribute to ADHD, such as genes, exposure to cigarette smoking, alcohol use, drug use or environmental toxins during pregnancy, low birth weight, or brain injuries. ADHD is more common in males than females. Other conditions, such as learning disabilities, anxiety disorder, conduct disorder, depression, and substance abuse, are common in people with ADHD.¹

Attention-deficit hyper activity disorder affects both children and adults. The lifetime prevalence of ADHD in adolescents aged 13 to 18 in the U.S. is 9%, and of those, 1.8% are classified as “severe.” ² In U.S. adults aged 18 and older, the lifetime prevalence is 8.1% with the average age of onset being 7.³ The 12-month prevalence in U.S. adults is 4.1%, with 41.3% of those being classified as “severe.”⁴ The global market size for attention-deficit hyperactivity disorder therapies was USD $11.2 billion in FY 2016.⁵

Learn more about adult ADHD from the organization ADHD in ADULTS at www.ADHDinadults.com.

For additional information on ADHD, please visit the National Institute of Mental Health website.

About Otsuka Pharmaceutical Co., Ltd.

Otsuka Pharmaceutical is a global healthcare company with the corporate philosophy: “Otsuka-people creating new products for better health worldwide.” Otsuka researches, develops, manufactures and markets innovative products, with a focus on pharmaceutical products for the treatment of diseases and nutraceutical products for the maintenance of everyday health.

In pharmaceuticals, Otsuka is a leader in the challenging area of mental health and also has research programs on several under-addressed diseases including tuberculosis, a significant global public health issue. These commitments illustrate how Otsuka is a “big venture” company at heart, applying a youthful spirit of creativity in everything it does.

Otsuka Pharmaceutical is a wholly owned subsidiary of Otsuka Holdings Co., Ltd., the holding company for the Otsuka group of companies that is headquartered in Tokyo, Japan. Otsuka Holdings had consolidated sales of approximately USD 11 billion in 2016 and approximately 31,000 employees at year end. Otsuka Pharmaceutical welcomes you to visit its global website at https://www.otsuka.co.jp/en. Learn more about Otsuka in the U.S. at www.otsuka-us.com and connect with us on Twitter at @OtsukaUS.

About Neurovance, Inc.

Headquartered in Cambridge, MA, Neurovance is a clinical stage neuroscience-focused company. Hypothesis-driven, proprietary research at Neurovance discovered and developed centanafadine (CTN), a triple reuptake inhibitor that represents a novel approach to help adults and children with ADHD, Attention-Deficit Hyperactivity Disorder. Neurovance is funded in a venture capital investment by Novartis Venture Fund, Venture Investors, Tekla Capital Management, GBS Venture Partners, State of Wisconsin Investment Board (SWIB) and Timothy J. Barberich.

Forward-looking Statements

Certain statements contained in this press release, including without limitation expectations as to future sales and operating results, constitute forward-looking statements. Forward-looking statements in this press release include statements regarding the anticipated benefits of the transaction; statements regarding the anticipated timing of filings and approvals relating to the transaction; statements regarding the expected timing of the completion of the transaction; and any statements of assumptions underlying any of the foregoing. Words such as “expects,” “anticipates,” “believes,” “plans,” “intends,” “estimates,” “projects,” “forecasts,” “outlook,” and similar expressions are also intended to identify forward-looking statements. The statements involve known and unknown risks, uncertainties, and other factors which may cause the company’s actual results, earnings, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the following: general industry and market conditions, general domestic and international economic conditions such as interest rate and currency exchange fluctuations, technological advances and patents attained by competitors, challenges inherent in new product development and clinical trials, claims and concerns about product safety and efficacy, obtaining regulatory approvals, domestic and foreign healthcare reforms, and healthcare cost containment, laws and regulations affecting domestic and foreign operations, and failure to gain market acceptance or third-party consents. Risks and uncertainties that could cause results to differ from expectations also include: uncertainties as to the timing of the offer and merger; uncertainties as to how many Neurovance stockholders will proffer their stock in the offer; the risk that competing offers will be made; and the possibility that various closing conditions for the transaction may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction. We will not undertake and specifically decline any obligation to update or correct any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

¹ National Institute of Mental Health, Attention Deficit Hyperactivity Disorder. Available at: https://www.nimh.nih.gov/health/topics/attention-deficit-hyperactivity-disorder-adhd/index.shtml (Accessed February 2017)
² Merikangas KR, He J, Burstein M, Swanson SA, Avenevoli S, Cui L, Benjet C, Georgiades K, Swendsen J. Lifetime prevalence of mental disorders in U.S. adolescents: Results from the National Comorbidity Study-Adolescent Supplement (NCS-A). J Am Acad Child Adolesc Psychiatry. 2010 Oct;49(10):980-989.
³ Kessler RC, Berglund PA, Demler O, Jin R, Walters EE. Lifetime prevalence and age-of-onset distributions of DSM-IV disorders in the National Comorbidity Survey Replication (NCS-R). Archives of General Psychiatry. 2005 Jun;62(6):593–602.
⁴ Kessler RC, Chiu WT, Demler O, Walters EE. Prevalence, severity, and comorbidity of twelve-month DSM-IV disorders in the National Comorbidity Survey Replication (NCS-R). Archives of General Psychiatry, 2005 Jun;62(6):617–27
⁵ IMS MIDAS database (accessed February 2017)