Otsuka Pharmaceutical to Acquire Mindset Pharma for Nearly $60M

Toronto-based Mindset Pharma Inc. (CSE: MSET) (OTCQB: MSSTF) will be acquired by Japan-based Otsuka Pharmaceutical Co. through its American subsidiary in an all-cash transaction valued at approximately C$80 million ($59.15 million), the company announced Thursday.

The agreement stipulates that each Mindset shareholder will receive $0.75 in cash for each share held, representing a 15.4% premium to the closing price of Mindset shares on August 30.

The deal comes months after the company released positive pre-clinical data on its nonhallucinogenic psychedelics. Mindset is also caught up in litigation over allegations that the company copied Reunion Neurosciences’ main psychedelic formula and presented it as its own invention while applying for a patent.

The Pocari Sweat sports drink maker was once one of the largest pharmaceutical companies on the Tokyo Stock Exchange because of its antipsychotic drug, Abilify (aripiprazole), which raked in a third of its sales until it lost patent protection in 2015. Its parent company, Otsuka Holdings Co. Ltd., has a market cap hovering above $20 million.

Makoto Inoue, president of Otsuka, said the acquisition of Mindset’s novel compounds and synthesis processes is expected to contribute to the company’s treatment developments for patients suffering from psychiatric disorders.

“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,” Inoue said.

Mindset CEO James Lanthier said that Otsuka is “ideally positioned to maximize the value of the Mindset assets and (intellectual property) portfolio.”

“We believe it maximizes value and is a great outcome for all Mindset stakeholders,” Lanthier said.

The transaction, which is subject to approval by Mindset shareholders and the Supreme Court of British Columbia, is expected to close around October 19, 2023.