Otsuka to acquire busulfan rights from PDL BioPharma

Otsuka Pharmaceutical Co., Ltd. (OPC) and PDL BioPharma, Inc. (PDLI) have entered into a definitive agreement under which Otsuka will acquire from PDL the rights to IV Busulfex (busulfan), including trademarks, patents, intellectual property and related assets, for $200 million, to be paid in cash at closing.

IV Busulfex is an oncologic product marketed and sold by PDL in the United States (US) and Canada, and through distributors in a number of other countries.

"The acquisition of IV Busulfex, a first-in-class drug therapy for conditioning prior to allogeneic haematopoietic progenitor cell transplantation, and the oncology expertise of PDL accelerates Otsuka's global oncology business," said Tatsuo Higuchi, President and Representative Director of Otsuka Pharmaceutical Co., Ltd. "We are currently developing first-in-class oncology drugs in the United States, including drugs to treat severe cancer pain (currently in phase II), along with oral mucositis and leukaemia (currently in phase I). Our focus is on global opportunities to contribute to the health of patients who are suffering from severe illness."

"We're pleased to enter into this agreement with Otsuka, which builds on the successful efforts of PDL's commercial team and enables this important product to continue to benefit patients worldwide," said L. Patrick Gage, Ph.D., PDL's interim chief executive officer.

"This transaction is a first step to deliver on our strategic goal to maximize value for our stockholders through our ongoing strategic process."This transaction follows PDL's decision, announced on October 1, 2007, to actively pursue the sale of its key assets. PDL continues with this strategic process, which includes working to maximize the value of its royalty stream, commercial products and antibody discovery, development and manufacturing assets.

Following the close of the transaction, OPC will oversee the outsourced manufacturing of the product, while its U.S. affiliate, Otsuka Pharmaceutical Development & Commercialization, Inc. (OPDC), will initiate clinical studies to investigate potential new indications for IV Busulfex.

Another OPC affiliate, Otsuka America Pharmaceutical, Inc. (OAPI), will market the product for its current indication in the United States. OPDC was established in 2007 and OAPI was established in 1989 by Otsuka America, Inc. (OAI). Both OPDC and OAPI are wholly owned by OAI, which is the holding company for OPC's interests in the US. OAI is wholly owned by OPC.

The transaction has been approved by the boards of directors of both companies and is expected to close in the first quarter of 2008, subject to antitrust clearance under the Hart-Scott-Rodino Act and satisfaction of other customary conditions.

Montgomery and Co., LLC is acting as financial advisor and Heller Ehrman LLP is acting as legal advisor to OPC in connection with the transaction. Merrill Lynch & Co. is acting as financial advisor and DLA Piper is acting as legal advisor to PDL in connection with the transaction. ]

IV Busulfex was approved by the U.S. Food and Drug Administration (FDA) in 1999 for use in combination with cyclophosphamide as a conditioning regimen prior to allogeneic haematopoietic progenitor cell transplantation (also referred as blood or bone marrow transplantation or BMT) for chronic myelogenous leukemia (CML). IV Busulfex is the only drug that is FDA-approved for use in combination with cyclosphosphamide as a conditioning agent in allogeneic haematopoietic stem cell transplantation for CML.

During the 12 months ended September 30, 2007, IV Busulfex sales were $29.4 million, a 29.7 percent increase over the $22.7 million in sales in the prior 12-month period. IV Busulfex is marketed in more than 40 countries worldwide.