In the biggest ever sale of an Israeli pharmaceuticals company, NeuroDerm, a developer of devices to treat diseases of the central nervous system, is being sold to Japan’s Mitsubishi Tanabe Pharma $1.1 billion.
Oded Lieberman, NeuroDerm’s CE0, said the acquisition would speed the development of its candidate treatment, known as ND0612, which analysts at Deutsch Bank said last week could become the standard of care for advanced Parkinson’s disease.
“Mitsubishi Tanabe Pharma has demonstrated development and commercialization expertise in the field of neurology and we are confident that the combination of their resources and the robust data supporting ND0612, our Phase III Parkinson’s disease product candidate, will help make this important new therapy available as broadly and rapidly as possible,” Lieberman said.
The price-tag the Japanese company awarded NeuroDerm is especially generous. It represented a 79% premium to NeuroDerm’s Nasdaq-traded share price on June 9, just before the stock began climbing on media reports the company was considering selling itself.
“Given the significant premium offered and existing shareholder agreements, we regard a counter bid to perhaps be unlikely,” Jefferies analyst Peter Welford said in a note to clients.
NeuroDerm has said its goal is to submit regulatory applications for ND0612 in Europe by the end of 2018.Welford said if the drug was approved, peak sales worldwide could reach $1.7 billion.
The Japanese drug maker said it was particularly attracted by ND0612. It said the deal was intended to help it “achieve its U.S. sales target of 80 billion yen” ($722 million) by its 2020 financial year.
The transaction will be the largest ever acquisition of an Israeli firm by a Japanese company, surpassing internet retailer Rakuten’s $900 million acquisition of chat app Viber in 2014. Although it has carried out successful clinical trials, the company has no revenues. It has accumulated losses of about $180 million.
Rumors of a possible sale of the company surfaced a month and a half ago when the Bloomberg News reported it was working with a financial adviser. At that point, the company was trading at a market value of $658 million but by Monday after the stock jumped 15.6% to $38.38 the figure had ballooned to $1.01 billion, just short of Mitsubishi Tanabe Pharma’s valuation.
NeuroDerm’s pump for Parkinson’s disease patients is similar in design to insulin pumps used by diabetes patients. It is attached to a belt and connected through a thin tube to the patient’s abdomen, delivering a constant flow of the medication.
NeuroDerm’s approach is designed to address the problem of medicating patients with advanced stages of the disease, including the rapid breakdown of the active ingredient Levodopa Carbidopa in the blood. That makes the medicine less effective when it is taken by mouth as the disease progresses, meaning that patients who take it orally are likely to suffer from longer bouts of symptoms including hand tremors and muscle stiffness.
NeuroDerm, which has a staff of 55, went public in a $75 million offering inn 2014 that valued the company at $490 million. It raised another $210 million from invesotrs over the next two years.
The U.S. venture fund Sequoia Capital has a 16.9% stake in the company. Other shareholders include Chairman Robert Taub, who was the controlling shareholder of Omrix Biopharmaceuticals, which was sold in 2008 to Johnson & Johnson for $438 million, with a 12.3% stake. The Israeli biotech entrepreneur Shmuel Cabilly has 10%.
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