Japan’s Astellas to buy Iveric Bio for $5.9bn in US biotech deal

Astellas Pharma agreed to buy US biotech group Iveric Bio for roughly $5.9bn, marking the Japanese drugmaker’s largest-ever acquisition and giving it access to the rapidly expanding market for age-related eye diseases.

Astellas said on Monday that it would use cash and loans to buy the New Jersey-based company, formerly known as Ophthotech, for $40 per share, representing a premium of 22 per cent to the US company’s closing price on Friday.

The deal marks the latest acquisition by Japanese companies — including beer maker Kirin and IT specialist Fujitsu — seeking growth outside their shrinking home market, even as a weaker yen makes takeovers more expensive.

Astellas, Japan’s second-largest pharmaceutical company by revenue, has spent more than ¥1tn ($7.3bn) in overseas acquisitions and partnerships since 2007, including its $3bn purchase of US drugmaker Audentes Therapeutics in 2020 and its $3.8bn takeover of US-based oncology specialist OSI Pharmaceuticals in 2010.

The latest acquisition will add Iveric’s ACP to Astellas’ portfolio. ACP is a treatment currently in trials for geographic atrophy, an eye disease that affects 1.6mn patients in the US. Shares in Astellas briefly rose 2 per cent following the deal’s announcement.

“We hope that ACP will become our third pillar” alongside menopause drug candidate fezolinetant and bladder cancer treatment padcev, said Naoki Okamura, who took over as chief executive in April, during an online news conference.

Astellas is searching for new blockbuster medicines with sales of $1bn and more a year. It is under pressure because its US patent for Xtandi, a popular prostate cancer drug whose sales are shared with Pfizer, is expiring in 2027. For the current fiscal year until March 2024, Astellas expects sales of ¥670bn from Xtandi.