Otsuka adopts new Mindset, dropping $59M to buy Canadian psychedelic biotech

With the first crop of psychedelics inching closer to the FDA’s decision desk, Otsuka Pharmaceutical has decided to have some skin in the game, buying psychedelic biotech Mindset Pharma for $80 million Canadian dollars ($59 million).

The all-cash transaction, announced Thursday, gives the Japanese pharmaceutical control over Mindset’s preclinical pipeline of psychedelics—referred to by Mindset as “families.” The lead asset, MSP-1014, is a psilocybinlike conjugate currently in lead optimization studies. The indication is not listed in the pipeline, but a previous letter from CEO James Lanthier to shareholders suggests the company believes it would be valuable as a treatment for depression. 

Shareholders of Mindset are set to receive 75 cents in cash per share, a premium compared to recent trading figures. The deal—Otsuka’s first acquisition of the year according to the Fierce M&A tracker—was unanimously approved by the boards of both companies. 

“Otsuka Pharmaceutical has designated psychiatry and neurology as one of its top priority therapeutic areas and has been developing antipsychotic agents with clinical significance on a global basis,” said Otsuka President Makoto Inoue in a release.

Beyond MSP-1014, Mindset is working on a short-acting, high-potency psilocybinlike med in addition to a low-potency, long-duration version. The fourth “family” is made up of DMT-inspired compounds. In the aforementioned letter from March, Lanthier said the company had also started to work on non-hallucinogenic therapies to treat broader central nervous system conditions. 

Otsuka’s veering into the psychedelic space comes as the company is cashing in on the successful development of two antipsychotic agents. Abilify Asimtufii, a collaboration between Otsuka and Lundbeck, received another approval by the FDA in April as an extended-release treatment for schizophrenia and bipolar disorder. Otsuka reported that (PDF) the drug raked in roughly $660 million in global sales in the second quarter, up 25.8% compared to the same period in 2022. Another Lundbeck-partnered med, Rexulti, also brought in around $660 million in the quarter, up 27%.