Otsuka and Sunovion Ink Neuropsychiatric Medicine Deal Worth Nearly $1 Billion

The companies said the collaboration recognizes a “great need for novel treatments in the area of neuropsychiatric medicine development.”

Otsuka Pharmaceutical and Sumitomo Dainippon Pharma have finalized a licensing agreement to develop and commercialize four clinical-stage neuropsychiatric compounds in a deal valued at nearly $1 billion. The four compounds are designed to take a unique approach to treating psychiatric diseases compared to current commercial products.

For Otsuka, the compounds covered in the agreement will support its psychiatric pipeline led by Rexulti, which was approved by the U.S. Food and Drug Administration in 2015 as an adjunctive therapy to antidepressants in adults with major depressive disorder and for adults with schizophrenia. Otsuka developed Rexulti in partnership with Denmark’s H. Lundbeck A/S.

The companies said the collaboration recognizes a “great need for novel treatments in the area of neuropsychiatric medicine development.” The compounds covered in the agreement include ulotaront, which is currently in Phase III development for schizophrenia. Ulotaront is a trace amine-associated receptor 1 (TAAR1) agonist with 5-HT1A agonist activity. It is the first TAAR1 agonist to enter into Phase III in adults and adolescents ages 13 to 17 years who have been diagnosed with schizophrenia. Ulotaront previously received Breakthrough Therapy Designation from the U.S. Food and Drug Administration for this indication.

In May, Sunovion, a subsidiary of Sumitomo, presented ulotaront data at the American Psychiatric Association that positively compared the safety of the drug with real-world safety reports of approved antipsychotics. It highlighted a differentiated profile of ulotaront. The presentation also demonstrated clinical data showing positive effects of both short-term and long-term treatment of schizophrenia patients with ulotaront. The data showed that treatment was associated with additional mean improvement from baseline to Week 26.

Schizophrenia is a complex mental disorder caused by an imbalance in the neurotransmitters that facilitate communication between neurons in the brain. That imbalance can cause patients to perceive things that are not real. People with schizophrenia experience disturbed thoughts, emotions and behavior, and they find it difficult to judge reality.

A second compound, SEP-4199 (non-racemic ratio of amisulpride) is in Phase III development for the treatment of major depressive episodes associated with bipolar I disorder. The Phase III study was initiated earlier this month. The other two compounds, SEP-378614 and SEP-380135, are currently in Phase I development. Sunovion discovered ulotaront, SEP-378614, and SEP-380135 in collaboration with PsychoGenics.

Makoto Inoue, president and representative director of Otsuka, said the company is committed to developing and commercializing new antipsychotics for patients in need. He said they are advancing the development of new medications that could treat “agitation associated with dementia of the Alzheimer’s type and the deployment of the world’s first digital medicine.” He touted the agreement with Sunovion and said they are confident the companies will be able to deliver significant value to patients.

“Otsuka’s recognition of the significant value of these assets reflects the innovative discovery and development efforts at Sunovion over the past decade, as well as our neuropsychiatry commercialization expertise and capabilities. We look forward to working with Otsuka colleagues as we advance novel compounds to treat patients with serious neuropsychiatric conditions,” Antony Loebel, president and chief executive officer of Sunovion said in a statement.

Loebel added that Sunovion is proud to collaborate with Otsuka on a “shared mission” of improving the lives of psychiatric patients.

Under the terms of the agreement, Otsuka made an upfront payment of $270 million to Sunovion, who is then eligible for milestone payments of up to $620 million.

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