Japanese pharmaceutical company Otsuka Pharmaceutical has made one of Big Pharma’s first pivots into the psychedelics space with the acquisition of Mindset Pharma.
After entering into a partnership 18 months ago to advance Mindset Pharma clinical programmes, Otsuka has now agreed to purchase the company through its wholly-owned subsidiary Otsuka America in an all-cash deal for CAD $80 million (£46.52 million).
In January 2022, Otsuka – a leader in the areas of mental, renal, and cardiovascular health which also has research programmes in oncology and several under-addressed diseases – made a payment of $5 million through its McQuade Centre for Strategic Research and Development to Mindset Pharma to support Mindset’s drug candidates into clinical testing.
Mindset, a drug discovery company and a portfolio company of psychedelics investment fund Negev Capital, is developing novel, optimised, next-generation psychedelic medications – in particular, psilocybin and DMT – to treat neuropsychiatric and neurological disorders.
In November 2022, Mindset received approval for a Phase II clinical trial evaluating the safety and efficacy of its lead candidate, MSP-1014 – a psilocybin-like pro-drug – in treating patients suffering from major depressive disorder.
The company is also developing an innovative process to chemically synthesise psilocybin in addition to its own proprietary compounds.
President and representative director of Otsuka, Makoto Inoue, commented: “Otsuka Pharmaceutical has designated psychiatry and neurology as one of its top priority therapeutic areas and has been developing antipsychotic agents with clinical significance on a global basis.
“With the addition of Mindset’s novel compounds and synthesis processes, we expect this acquisition will further contribute to the treatment of patients suffering from psychiatric disorders.”
CEO of Mindset, James Lanthier, added: ”We are thrilled to announce this all-cash transaction with Otsuka as we believe it maximises value and is a great outcome for all Mindset stakeholders.
“We believe Otsuka is ideally positioned to maximise the value of the Mindset assets and IP portfolio to the future benefit of patients.”
In a public comment, Ken Belotsky, Partner at Negev Capital, stated: “This acquisition serves as a strong indicator of the shifting paradigm in pharmaceutical research and development. It confirms that Big Pharma is now recognising the tremendous value and transformative potential of psychedelic treatments for neuropsychiatric and neurological disorders.
“Mindset Pharma has been at the forefront of this exciting field, developing novel compounds and synthesis processes that stand to revolutionise treatment options for patients suffering from a range of psychiatric disorders.
“Otsuka’s global reach and extensive expertise in psychiatry and neurology make it an ideal partner to propel Mindset’s innovative solutions to new heights. This deal offers an immediate and attractive premium to Mindset shareholders, and it has been unanimously approved by the respective boards of Otsuka and Mindset, further underscoring the alignment and synergistic potential of this partnership.
“We extend our hearty congratulations to the teams at both Mindset Pharma and Otsuka Pharmaceutical for this remarkable achievement. We believe that this acquisition will substantially benefit patients in need and create value for shareholders and stakeholders alike.
“We also look forward to the special meeting of Mindset security holders, where this transformative deal will be up for approval.”
