Avanir has made something of a reputation for itself by mixing a pair of generics--a cough suppressant and an old heart medicine--into a new elixir that can calm an emotional outburst. And Japan's Otsuka has stepped in to snap up the company, its product and a pipeline of repurposed meds for a hefty $3.5 billion.
Formulated as the drug Nuedexta, the Aliso Viejo, CA-based biotech ($AVNR) has been selling its therapy as a treatment for pseudobulbar effect, a condition characterized by uncontrolled outbursts of intense crying or laughing. And the same concoction--a mix of the cough suppressant dextromethorphan (commonly found in NyQuil, among other cough meds) and the generic quinidine (used to control irregular heartbeats) into AVP-923--has demonstrated that it can calm agitated Alzheimer's patients in a mid-stage trial.
That approach has earned a number of scoffs from analysts. But Otsuka--which has remained focused on mental health--sees plenty of potential in Alzheimer's, a field marked by unproven theories and littered with the debris of failed clinical studies. Of particular importance to Otsuka, its schizophrenia drug Abilify, a $5 billion annual earner, is about to lose patent protection and adding new drugs now is a top priority.
A couple of months ago Avanir's shares shot up 45% on the positive bottom line for its Alzheimer's study. The same mix had failed a study for pain, but the company believes it's ready to target a pivotal trial for Alzheimer's while advancing a slate of studies for a range of hard-to-treat conditions that includes Parkinson's, depression and autism.
Just days ago Avanir's drug-device combo that delivers a shot of sumatriptan--another aging, repurposed generic--to treat migraines was shot down by regulators, as expected. But the biotech has not given up on AVP-825, or OptiNose, and is planning to come back with a response to the FDA's list of issues.
"As we bring together Otsuka's experience and business track record in the area of mental illnesses with Avanir's strengths in neurologic diseases, we believe that we can evolve into a truly global CNS pharmaceutical company," says Otsuka Pharmaceutical President and Representative Director Taro Iwamoto. "Avanir's creativity and proven execution on drug discovery and development for largely unexplored medical indications, typified by PBA, represents a hand-in-glove fit with Otsuka's culture. We admire and respect Avanir's innovation, vision, and execution and want to continue to grow together."
- here's the release