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Japan's Astellas Pharma to buy Audentes for US$3b in gene therapy push

[TOKYO] Japan's Astellas Pharma on Monday agreed to buy Audentes Therapeutics for approximately US$3 billion in cash as it looks to bolster its pipeline of genetic medicines for rare neuromuscular diseases.

The deal points to drugmakers' growing interest in gene therapies, one of the hottest areas of drug research.

Gene therapies aim to correct certain 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.

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"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 press release.

Astellas' offer of US$60 per share represents a 110 per cent premium to the Monday close of San Francisco-based Audentes. The all-cash transaction is valued at approximately US$3 billion including the purchase of all common shares, options, restricted stock units and other securities.

The company is aiming to seek FDA approval for the drug in mid-2020.

The deal is expected to close in the first quarter of 2020, the companies said in a statement. The acquisition is subject to regulatory approval including US antitrust clearance.

Shares in Astellas, Japan's second-largest drugmaker by sales, fell 1.5 per cent on Tuesday in Tokyo, compared with a 0.8 per cent decline in the broader market.

The deal also marks the latest consolidation in the industry which saw Japan's Takeda Pharmaceutical purchase Britain's Shire for US$59 billion.

Morgan Stanley & Co LLC, is Astellas' financial adviser while Covington & Burling LLP is the company's legal counsel.

Centerview Partners LLC is acting as financial adviser to Audentes and Fenwick & West LLP is its legal counsel.