Reuters: Hot Stocks: UPDATE 2-Japan's Otsuka says to buy cancer drug maker Astex Pharma

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UPDATE 2-Japan's Otsuka says to buy cancer drug maker Astex Pharma Sep 5th 2013, 08:26 Thu Sep 5, 2013 4:26am EDT * Otsuka to buy Astex shares through tender offer * Otsuka offering $8.50 a share * Astex shares gain to $9.39 on report of acquisition (Adds detail on recent acquisitions) Sept 5 (Reuters) - Japanese drugmaker Otsuka Holdings Co said on Thursday that it had agreed to buy Astex Pharmaceuticals Inc for close to $900 million to tap cancer drugs under development by the U.S. company. The move comes as Otsuka seeks to increase revenue streams as patents for its mainstay Abilify schizophrenia treatment will begin to expire. Otsuka said in a statement through the Tokyo Stock Exchange that it would launch a tender offer beginning within the next 10 days that would run for 20 days. The company has set aside $886 million to cover the purchase of Astex at $8.50 a share. Astex, whose only approved drug, Dacogen, treats a blood disorder called myelodysplastic syndromes, is developing drugs to treat prostate, lung and ovarian cancer. As revenue is squeezed by expiring patents, large pharmaceutical companies have increasingly been looking to acquire smaller biotech firms to gain access to new drugs that could bolster income. Amgen Inc last month struck the fifth-largest biotechnology deal in history by agreeing to buy Onyx Pharmaceuticals Inc for $10.4 billion. Other deals in the last three months include AstraZeneca Plc buying privately owned Pearl Therapeutics for up to $1.15 billion and Amplimmune for up to $500 million. In the first half of 2013, the overall volume of healthcare mergers and acquisitions jumped more than 30 percent compared with the same period last year. Shares of Astex, which had a market capitalisation of $634.2 million as of Tuesday's close, rose as much as 41 percent to a nine-year high of $9.39 on the Nasdaq. The purchase was reported earlier by Japanese business daily the Nikkei. Otsuka shares fell 1 percent in Tokyo on Thursday, compared with a flat benchmark Nikkei average. (Reporting by Tim Kelly in Tokyo and Ben Hirschler in London; Editing by Chris Gallagher) Link this Share this Digg this Email Reprints

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