Japanese firm Mitsubishi Tanabe Pharma has signed a deal to acquire Neuroderm Ltd (NASDAQ:NDRM) for $1.1 billion.
The Japanese firm has agreed to buy Neuroderm for $1.1 billion in cash and the acquisition is part of the company’s plan to expand its business in the U.S. Neuroderm is an Israeli drug maker and it captured the attention of Mitsubishi Tanabe thanks to its treatment for Parkinson’s disease. The drug is currently in advanced clinical trials in Europe and the U.S and there are plans to put it on the market in 2019. There have been reports that the new acquisition deal will help Mitsubishi Tanabe to reach its sales target of $722 million in the U.S by 2020.
The deal is an iconic moment for both firms
The Mitsubishi Tanabe-Neuroderm deal will go down in history as the largest acquisition of an Israeli firm by a Japanese firm. The deal takes the crown from the $900 million acquisition of chat app Viber by Rakuten Inc in 2014. The Japanese firm is expected to pay $39 per Neuroderm share which is about a 17 percent premium on the company’s stock price at Frida’s close. The price also marks a 79 percent premium on the Israeli company’s stock price on June 9.
Oded Lieberman, the CEO of Neuroderm stated that the new acquisition will offer a lot of benefits especially to the company’s shareholders. The new drug will also provide an alternative new treatment for patients with Parkinson’s disease. Mitsubishi Tanabe reported that it gained the support of three Neuroderm directors who control about 33.7 percent of the company’s stock.
“Given the significant premium offered and existing shareholder agreements, we regard a counter bid to perhaps be unlikely,” stated Peter Welford an analyst at Jefferies.
Neuroderm is currently developing drug treatments for addressing central nervous disorders. ND0612 is the company’s lead product for treating Parkinson’s disease. The Israeli firm revealed that it has plans to submit its regulatory applications for ND0612 before the end of 2018. Welford pointed out that the treatment could hit sales as high as $1.7 billion if the drug is approved.
Neuroderm stock closed the latest trading session at $38.35.
