Otsuka Pharmaceutical has acquired Transcend Therapeutics for $700 million upfront through its wholly owned subsidiary, Otsuka America, in a deal that could also deliver up to $525 million in milestone payments tied to assets in development.
In striking the buyout, Otsuka will get its hands on Transcend’s lead asset, TSND-201, a potential neuroplastogen for post-traumatic stress disorder (PTSD) and other psychiatric conditions, according to a March 27 release.
The drug, which scored an FDA breakthrough designation last year, induces rapid and durable neural plasticity in the brain. Neuroplasticity—the brain’s ability to reorganize neural circuits—supports memory formation and emotional regulation. The deal is expected to close in the second quarter of this year.
Founded in 2021, New York-based Transcend reported positive phase 2 data last year for TSND-201, an MDMA analog. The drug is not hallucinogenic but is described as a triple reuptake inhibitor and releaser that acts on monoamine transporters, including those for serotonin, norepinephrine, and dopamine. It is designed to increase monoamine concentrations within the synaptic cleft, thereby enhancing neuroplasticity. Patients are currently being recruited for a phase 3 trial.
In a statement, Otsuka President Makoto Inoue described TSND-201 as “a potential paradigm-shifting therapy in the field of psychiatry.”
Transcend is also developing novel prodrugs aimed at improving the balance of efficacy, safety, and tolerability of TSND-201 and is preparing a candidate for an Investigational New Drug application to the FDA.
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Otsuka, which reported a 6% year-over-year increase in revenue and 5.8% growth in income in its latest full-year financial results, has been active in acquiring assets across a diverse set of indications over the past year. In July, the Japanese pharma entered into a $613 million biobucks deal with Swedish biotech Cantargia for IL1RAP-targeting antibodies designed to treat autoimmune and inflammatory diseases. In October, the company added a deal worth up to $420 million for Asia-Pacific rights to 4DMT’s eye gene therapy asset ahead of a phase 3 trial.
In November, Otsuka received FDA approval for its first-in-class treatment for immunoglobulin A nephropathy (IgAN). The drug, Voyxact, is a once-monthly self-administered injection that blocks a protein involved in autoantibody production, which may trigger inflammation and kidney damage.
Between Otsuka’s July deal with Cantargia and today’s acquisition, the company’s stock has risen more than 64%.
