Mitsubishi Tanabe to acquire NeuroDerm

REHOVOT, Israel & TOKYO—Israeli clinical-stage pharmaceutical company NeuroDerm Ltd., which is developing drug-device combinations for central nervous system disorders, was making the rounds in June at various meetings. Specifically, representatives of the company attended the 21^st International Congress of Parkinson’s Disease and Movement Disorders in Canada and the Third Congress of the European Academy of Neurology in Amsterdam to share final data from Trial 006, a Phase 2 clinical study of ND0612H—NeuroDerm’s high-dose continuous, subcutaneously delivered levodopa/carbidopa (LD/CD) liquid formulation—in patients with advanced Parkinson's disease.

And while there may have been interest in the company prior, the promising study results probably have a lot to do with the announcement on July 24 that Mitsubishi Tanabe Pharma Corp. (MTPC) had entered into a definitive agreement with NeuroDerm under which MTPC will acquire all of the outstanding shares of NeuroDerm for a total diluted equity value of $1.1 billion (about $39 per share in cash).

For those who enjoy the sometimes dizzying process details of mergers and acquisitions, the merger will be conducted through a reverse triangular merger, in which MTPC’s wholly owned merger subsidiary established in Israel solely for the purpose of the acquisition process will merge into NeuroDerm, after which NeuroDerm will become the surviving entity. Upon the closing of the transaction, NeuroDerm will become a wholly owned subsidiary of MTPC.

Although it is unclear whether MTPC was attracted to the Parkinson’s disease and movement disorder realm in particular, the potential value of NeuroDerm’s portfolio, including ND0612H, seems very clear. As MTPC noted of the objectives and background of the acquisition:

NeuroDerm is a clinical-stage pharmaceutical company that develops novel formulation technology and drug-device combinations for Parkinson’s disease. Its lead product candidate, ND0612 has commenced Phase 3 clinical trials in the U.S. and Europe, and the product is expected to launch in FY2019. Given the importance of controlling blood levels of levodopa in the treatment of Parkinson’s disease, ND0612 is expected to be used to treat advanced-stage Parkinson’s disease, and will be used in patients for whom oral levodopa is no longer effective in the control of motor complications. NeuroDerm is the first to develop liquid levodopa and carbidopa in the world. ND0612 can be continuously subcutaneously administered over a 24-hour period through a convenient, small belt-worn pump.

In its “Medium-Term Management Plan 16–20: Open Up the Future,” MTPC stated that it will strive, through in-house sales, to rapidly build a foundation for sustained growth in the U.S., the world’s largest pharmaceutical market.

As a first step toward advancing its franchise in the U.S., MTPC is expected to launch Radicava, an FDA-approved treatment option for amyotrophic lateral sclerosis (ALS) in the U.S. market in August 2017. Additionally, the acquisition of ND0612 through this transaction is intended to enable MTPC to achieve its U.S. sales target of 80 billion yen by FY2020, which is part of its Medium-Term Management Plan. MTPC will expand its product pipeline in the central nervous system disease area and advance its goal of providing patients with innovative drugs to address unmet medical needs.

As for NeuroDerm’s observations, the company noted that the transaction has received unanimous approval by its board of directors and that the offer from MTPC represents a premium of 79 percent over the unaffected price on June 9, 2017 of NeuroDerm’s ordinary shares on the NASDAQ stock market, and a 17-percent premium over the closing stock price on July 21, 2017. Assuming typical regulatory and shareholder approval timeframes, NeuroDerm currently anticipates the transaction will close in the fourth quarter of 2017.

“We believe that this transaction will yield important benefits for NeuroDerm’s shareholders and the Parkinson’s disease patients that urgently need new therapies,” said Dr. Oded S. Lieberman, CEO of NeuroDerm. “MTPC has demonstrated development and commercialization expertise in the field of neurology, and we are confident that the combination of their resources and the robust data supporting ND0612, our Phase 3 Parkinson’s disease product candidate, will help make this important new therapy available as broadly and rapidly as possible. The transaction also provides our shareholders with a significant return on their investment in NeuroDerm, reflecting the value that we have created with our pipeline and technologies.”

In earlier news releases about the data reported in June regarding Trial 006, Lieberman said: “The significant increase in good on-time coupled with a significant reduction in off-time, including a complete resolution of off-time to zero in 42 percent of patients in the first of our two regimens, demonstrates the substantial potential of 24-hour administration of ND0612H. The results of this study offer additional evidence that this innovative therapy can transform the care and outcome for patients with advanced Parkinson’s disease, and suggest that ND0612 can provide significant patient benefit without the surgical risks associated with deep brain stimulation and LD/CD intestinal gel.”

NeuroDerm is developing central nervous system product candidates that are designed to overcome major deficiencies of current treatments and achieve enhanced clinical efficacy through continuous, controlled administration. NeuroDerm’s main focus is in Parkinson's disease, where it has three clinical-stage product candidates in development which offer a solution for almost every Parkinson’s disease patient, from moderate to the very severe stage of the disease. The primary product candidates are a line of LD/CD products administered through small belt pumps that deliver a continuous, controlled dose of LD/CD. The LD/CD product candidates, ND0612L and ND0612H, are aimed at the treatment of moderate and advanced Parkinson’s disease patients, respectively, and are delivered subcutaneously. NeuroDerm is also designing a patch pump for future use. In addition, NeuroDerm is developing ND0701, a novel subcutaneously delivered apomorphine formulation for patients who suffer from moderate to severe Parkinson’s disease and who do not respond well to LD/CD.