Japanese drugmaker Astellas Pharma on Sunday agreed to acquire Iveric Bio for about $5.9 billion, betting that a medicine the biotechnology company has developed for a common type of vision loss can help it build an eye drug business.
Astellas will pay $40 per share for Iveric, representing about a 22% premium to the company’s closing price on Friday but 75% more than its average trading price in March. The boards of both companies have unanimously backed the acquisition. If approved by shareholders and regulators, the buyout could close in the third quarter.
The deal hands Astellas a drug called Zimura that Iveric is studying as a treatment for a form of vision loss known as geographic atrophy. Iveric’s drug already succeeded in a pair of Phase 3 trials and is currently being reviewed by U.S. regulators. A decision is expected by Aug. 19.
Pharmaceutical companies have increasingly turned to dealmaking to help offset patent losses that are soon expected for many of the industry’s top-selling drugs. Over the last two months, drugmakers have spent roughly $65 billion in total on buyouts, led by Pfizer’s $43 billion acquisition of cancer biotech Seagen, according to BioPharma Dive data.
Astellas is among those with drugs expected to soon face generic competition. Its prostate cancer drug Xtandi is set to lose patent protection in 2027. Zimura could help soften the blow, as well as provide a “foundation of ophthalmology focused capabilities,” including a commercial team and access to a network of experts and medical institutions, Astellas said.
Zimura is forecast to generate $555 million and $871 million in annual revenue during Astellas’ “crucial years” of 2026 and 2027, respectively, and $2.4 billion by 2034, wrote Jefferies analyst Stephen Barker.
Yet Iveric’s drug faces competitive challenges. Zimura is one of several similar medicines in development for geographic atrophy, and trails a treatment from Apellis Pharmaceuticals, Syfovre, that in February became the first marketed medicine for the condition.
Like Apellis’ drug, Zimura blocks activation of the complement system, a part of the body’s innate immune response. Both medicines are meant to forestall the progression of geographic atrophy, which causes the formation of patchy lesions in the eye that can obstruct vision and get larger with time. In testing, they slowed the growth of those lesions, but didn’t show an immediate effect on vision.
The drugs are associated with a small but increased chance of the formation of new blood vessels that can require additional therapy, a risk that may grow with time. Syfovre’s labeling includes warnings for potential infections and inflammation as well.
Still, Syfovre and Zimura are viewed as potential blockbusters and have made both companies acquisition targets. Approval of Syfovre led to a 50% stock surge for Apellis, which has reportedly attracted interest from potential buyers. (Iveric’s shares have climbed by about 50% since Syfovre’s clearance as well.)
Apellis’ drug could have an advantage on the market, wrote Evercore ISI analysts Umer Raffat and Jon Miller in a client note on Sunday. Syfovre is injected into the eye once every 25 to 60 days, while Zimura has been tested as a monthly injection for the first year and every other month afterwards. Apellis’ labeling also has two years worth of data and its studies included patients with lesions in more parts of the eye, they wrote.
“There was a fair amount of skepticism heading into the launch,” Raffat and Miller said. “However, early feedback on Apellis launch has been excellent.”
Apellis will report quarterly results on Thursday. Shares fell 8% in pre-market trading Monday.
For Iveric, the acquisition represents a significant turnaround. Once known as Ophthotech, the company was previously known for an age-related macular degeneration drug. However, that treatment failed multiple Phase 3 tests, triggering layoffs, a strategic reset and a name change to Iveric.
Though Iveric rebranded as a gene therapy company, Zimura, a biologic held over from the Ophthotech days, has remained its most valuable asset.