Otsuka Pharmaceutical Set to Acquire Mindset Pharma in C$80 Million Deal

TORONTO — Mindset Pharma Inc. based in Toronto, is set to be acquired by the Japan-based Otsuka Pharmaceutical Co. via its American subsidiary. This all-cash deal, announced Thursday, is valued at about C$80 million ($59.15 million).

The terms of the agreement denote that for every share held, Mindset shareholders will obtain $0.75 in cash. This translates to a 15.4% premium on Mindset’s closing share price as of August 30.

This strategic acquisition comes in the wake of Mindset unveiling positive pre-clinical data on its nonhallucinogenic psychedelics. However, it’s worth noting that Mindset is currently enmeshed in legal proceedings over claims that the company duplicated Reunion Neurosciences’ primary psychedelic formula, representing it as an original creation during patent application procedures.

Otsuka, recognized by many for its Pocari Sweat sports drink, previously claimed a dominant position on the Tokyo Stock Exchange. The company owed much of its success to the antipsychotic drug, Abilify (aripiprazole), which once accounted for a third of its sales revenues. However, this changed post-2015, after the drug’s patent protection expired. As of now, its parent company, Otsuka Holdings Co. Ltd., maintains a market capitalization slightly over $20 million.

Otsuka’s president, Makoto Inoue, emphasizes the significance of this acquisition. He suggests that Mindset’s innovative compounds and synthesis methods are anticipated to bolster Otsuka’s ongoing efforts in devising treatments for patients grappling with psychiatric disorders.

“Otsuka Pharmaceutical remains committed to psychiatry and neurology as pivotal therapeutic domains. Our global initiatives center around introducing clinically significant antipsychotic agents,” Inoue stated.

James Lanthier, Mindset’s CEO, expressed optimism regarding the merger, asserting Otsuka’s aptness in leveraging the full potential of Mindset’s assets and intellectual property. “This acquisition serves as a testament to the tangible value Mindset brings to the table, offering a win-win scenario for all stakeholders involved,” Lanthier remarked.

This deal awaits approval from both Mindset shareholders and the Supreme Court of British Columbia. If all goes as planned, the transaction is slated to finalize by October 19, 2023.