Astellas Pharma Inc. acquired Ogeda SA to align its urology portfolio with an area of unmet need in women's health — not to focus on gynecology.
"Currently, gynecology is not one of our focused areas and we are not intending to establish it as our new focused area by acquiring Ogeda. The deal was based on [Ogeda's lead compound fezolinetant's] ability to effectively address an area of high unmet need, regardless of therapy area," Tyler Marciniak, head of product communications at Astellas, said in an email to S&P global Market Intelligence.
However, gynecology is not unfamiliar terrain for Astellas.
Astellas has engaged with gynecologists for a number of years as one of its biggest franchises is overactive bladder, or OAB, therapy, and "there is an overlap in physicians treating women suffering from [menopause-related vasomotor symptoms] and OAB," Marciniak said.
Ogeda, a clinical research company incorporated in 1994 as a University of Brussels spinoff, had been the target for a number of drug manufacturers.
"After the publication of our phase 2a data in early January, five candidates — two mid-pharmas and three big pharmas, including Astellas — intensified their evaluation," Ogeda CEO Jean Combalbert told S&P Global Market Intelligence in an email.
In January, fezolinetant showed promising data from its phase 2a clinical trial in the treatment of menopausal hot flashes.
Hot flashes are the sudden feelings of intense heat, mostly felt on the face, neck and chest and can include skin reddening, blushing and profuse sweating. This may occur due to specific drug actions, but are most commonly experienced by menopausal women. In the U.S., about 75% to 80% of menopausal women experience hot flashes.
Patients treated with fezolinetant showed a 93% reduction in the frequency of moderate-to-severe hot flashes at week 12, compared with 54% reduction for the placebo group. The severity of hot flashes was also reduced by 70%, compared with 23% for the placebo group.
Synergy with urology portfolio
Analysts agree Astellas will create synergy by adding fezolinetant to its urology portfolio.
Astellas needs to expand its research and development pipeline, and one of its biggest franchises is the treatment for overactive bladder, said Hidemaru Yamaguchi, managing director and analyst at Citigroup Global Markets Japan Inc., Research Division, in an email to S&P Global Market Intelligence.
"The majority of patients facing overactive bladder are women. So, the urology franchise is really close to the women's [health] franchise. There is synergy," he said.
"Astellas is not active in women's health. I think Astellas bought Ogeda because the latter has a good non-hormone medicine to treat menopausal hot flashes," Tokyo-based Mizuho Securities Co. Ltd. analyst Hiroshi Tanaka said in an email to S&P Global Market Intelligence.
The companies will work together to align their products, with fezolinetant's development a focal point.
"Ogeda and Astellas will develop in cooperation an integration process," Combalbert said regarding plans for fezolinetant. "Ogeda also has other research stage programs relating to certain [G-protein coupled receptors]. Astellas will make further investigation on these programs after closing of the transaction," he added.
Ogeda is expected to launch a larger-scale phase 2b study for fezolinetant in 2017. Combalbert anticipates the drug reaching the market around 2022.
Remaining active in M&A
Ogeda is Astellas' second acquisition in less than six months, and the Japanese drugmaker remains open to more opportunities.
In December 2016, Astellas acquired Germany-based Ganymed Pharmaceuticals AG for €422 million, and in April 2017 it committed up to €800 million for Ogeda.
Astellas is interested in innovation, new technologies and therapeutic techniques like regenerative medicine, cell therapy and new disease fields, Marciniak said.
The drugmaker is in a strong position to finance further acquisitions, analysts said.
"[Astellas] has enough cash. [The Ganymed and Ogeda acquisitions] will be booked as non-fixed assets. It will not have significant impact on [their balance sheet]. [Astellas] has ¥348 billion in cash, ¥93 billion in other financial assets. Their debt is ¥27 billion only," said Citigroup's Yamaguchi.
"Astellas' [balance sheet] is good. At the end of December, after the Ganymed purchase, it had more than ¥440 billion worth of cash and financial assets," Mizuho analyst Tanaka said.
As of April 11, US$1 was equivalent to ¥109.70.