Ophthalmology specialist Iveric snapped up by Astellas for $5.9 billion

03-May-2023 - Last updated on 03-May-2023 at 16:18 GMT

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The Japanese pharmaceutical giant Astellas Pharma has taken over the U.S. company Iveric Bio in a $5.9 billion deal to get hold of its ophthalmology-focused pipeline.

This includes Iveric’s lead candidate, which is due for an approval decision from the U.S. Food and Drug Administration (FDA) in August 2023.

Astellas acquired Iveric via Berry Merger Sub, a subsidiary of Astellas U.S. Holding, for $40.00 per share. This is a premium of 64% over Iveric Bio’s unaffected closing share price at the end of March, which was $24.33.

Going forward, Iveric Bio will be an indirectly wholly-owned subsidiary of Astellas and will add its ophthalmology expertise and infrastructure to Astellas’ own efforts.

“The opportunity to create a world-class entity with the ophthalmology expertise and capabilities of Iveric Bio and the global reach and resources of Astellas is unique and has the potential to benefit patients worldwide suffering from blinding retinal diseases, including geographic atrophy (GA),” said Pravin U. Dugel, president of Iveric Bio, in a public release.

Close to the market

Iveric Bio’s lead candidate, avacincaptad pegol (ACP), is in development for the treatment of GA secondary to age-related macular degeneration (AMD). In this condition, cells in the retina degenerate and die with age, leading to visual impairment and eventually complete blindness.

ACP is an oligonucleotide drug designed to block the cleavage of a protein in the complement immune system called C5. The dysregulation of C5 leads to harmful inflammation linked to the development of GA, so ACP has the potential to slow the development of the condition.

In February 2023, Iveric applied for the U.S. FDA approval of ACP in GA based on promising results from two large clinical trials. A decision is expected by August 19, 2023.

Other pipeline candidates

In addition to its lead program, Iveric is developing ACP for the treatment of the rare genetic condition autosomal recessive Stargardt disease. The program is currently in a phase 2 trial expected to finish next year.

In the preclinical stage, Iveric also has a second treatment for GA, in addition to several gene therapy candidates for the rare conditions Stargardt disease, Leber congenital amaurosis type 10 and Usher syndrome type 2A.

Astellas’ plan

With the Iveric buyout, Astellas continues to prioritize investments in blindness and regeneration, one of its five primary focuses. The deal, with a potential commercialization on the horizon, is expected to help Astellas beef up its revenues as the patent expires on Astella’s prostate cancer treatmnent, Xtandi, later this decade.

To bankroll the deal, Astellas amassed cash from bank loans and issuing of commercial paper. The acquisition is expected to close in late 2023.

GA market to grow

As the population of many countries gets older, the need for treatments for AMD and GA are increasing. The market size for GA was worth $37.8 billion in 2023 and could reach $126.41 billion by 2031.

The market growth is also spurred by the emergence of new treatments for GA. In February 2023, the first-ever GA treatment was greenlit by the U.S. FDA: Apellis Pharma’s Syfovre. Assuming a positive decision by the regulator in August, ACP could become the second.