Otsuka to acquire Transcend Therapeutics in $700 million PTSD drug deal
Otsuka Pharmaceutical said its U.S. subsidiary plans to acquire Transcend Therapeutics for $700 million, with up to $525 million more tied to sales milestones. The deal would add TSND-201, a methylone-based PTSD drug now moving into Phase 3 testing in the U.S.
Otsuka Pharmaceutical said its American subsidiary plans to acquire privately held, New York-based Transcend Therapeutics in a $700 million buyout, adding an experimental medicine for post-traumatic stress disorder and other psychiatric conditions. In addition to the upfront payment, Otsuka offered up to $525 million more if Transcend’s assets ultimately hit certain sales milestones, and the companies expect to complete their deal sometime between April and the end of June.
If finalized, the acquisition would hand Otsuka a drug meant to rapidly restore and improve neuroplasticity, or the brain’s ability to rewire and adjust the connections between neurons. Neuroplasticity impairment is a fundamental component of many psychiatric conditions, including PTSD, where chronic stress and trauma can keep brain cell networks stuck in a fear-based survival mode.
The active ingredient in Transcend’s TSND-201 is methylone, an analog of MDMA that was first synthesized three decades ago and widely used as a “designer drug.” TSND-201 engages with certain transporter proteins that regulate neurotransmitters like serotonin, norepinephrine and dopamine, which, according to Transcend, results in “rapid and sustained enhancement of neuroplasticity.”
Transcend has also said its drug does not act on a key serotonin receptor that governs mood, cognition and perception. Avoiding that receptor mediates the potential hallucinogenic effects, the company says. Two years ago, Lykos Therapeutics tried unsuccessfully to get the Food and Drug Administration to approve MDMA as a therapy aid for PTSD, and a major sticking point was that most participants in its studies were able to decipher if they had been given the drug or a placebo because MDMA elicits unmistakable changes to cognition and the senses.
Results from a mid-stage clinical trial that tested TSND-201 in adults with PTSD were published last month in JAMA Psychiatry. Recruitment is now underway for the Phase 3 trial in the U.S.
Otsuka said TSND-201 works in a way that is “distinct” from its existing medicines and development programs, and that buying Transcend should expand its psychiatry and neurology portfolio and strengthen its position in those fields. Otsuka is best known for Abilify Maintena and Rexulti; in its 2024 fiscal year, the company recorded revenue of 2.33 trillion Japanese yen, or roughly $15.4 billion, with 70% coming from its pharmaceutical unit.