Sector News

Astellas finally wraps up its $379M deal for Ocata

February 10, 2016
Life sciences

After months of agitating and activism from miffed shareholders, Astellas has finally convinced the majority of Ocata Therapeutics investors to accept its $8.50-a-share offer, ending a surprisingly protracted process for the Japanese drugmaker.

As of Tuesday’s market close, Ocata investors had tendered 53.6% of the company’s outstanding shares to Astellas, crossing the threshold necessary for closing the deal. Astellas has since bought up the remaining shares, absorbing Ocata and declaring it a wholly owned subsidiary.

Astellas first announced its $379 million offer to acquire Ocata in November, expecting investors to hand over their shares within 20 days. But a group of jilted shareholders mounted a campaign to block the deal, claiming its 79% premium to Ocata’s market cap still undervalued the stem cell-focused company and reaching out to potential white knights, elected officials and federal regulators in hopes of fetching a higher price.

At the expiry of the initial tender offer period, Astellas still hadn’t swayed a majority of shareholders, forcing the company to twice extend the deadline. The latest delay, disclosed Jan. 22, set the offer period to expire Wednesday.

The issue, according to Ocata shareholders, was that Astellas’ bid focused solely on Ocata’s stem cell assets in ophthalmology without accounting for the company’s preclinical projects in autoimmune and other diseases, which investors claimed were more valuable.

Ocata, formerly Advanced Cell Technology, is among the pioneers of therapeutic stem cell development, enduring the field’s peaks and valleys since its foundation in 1994. The company’s share price has repeatedly cratered, and the biotech has endured multiple reorganizations over the past decade. Taking the name Ocata in 2014, the company narrowed its focus to treatments for disorders of the eye, advancing clinical programs in Stargardt’s disease and macular degeneration.

By Damian Garde

Source: Fierce Biotech

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