Kyowa Hakko to buy ProStrakan for around $474 million

Troubled Scotland-based specialty drugmaker ProStrakan Group (LSE: PSK) has accepted a takeover bid from Japan’s Kyowa Hakko Kirin (4151: JP), valuing the company at £292 million ($473.3 million), or 130 pence a share. This is a 41% premium to the closing price of 92.5 pence per share on November 12, 2010, being the last business day immediately prior to the start of ProStrakan’s current offer period, and up from the 108.88 pence closing price on Friday.

Once touted as a promising young pharmaceutical firm, ProStrakan ran into problems in its drive for a stake in the lucrative US market, where manufacture of Sancuso (granisetron), its novel skin-patch treatment that prevents chemotherapy-induced nausea and vomiting, had been halted after a factory inspection by the Food and Drug Administration, and that there was “insufficient stocks” to meet customer demand. It also suffered a delay in the US approval of Abstral (fentanyl) for cancer pain and Fortesta (testosterone), as well as losing its chief executive Wilson Totten last year (The Pharma Letter September 8, 2010.

At the end of last year, ProStrakan agreed a refinancing deal with Canada’s Paladin Labs which included a new strategic relationship in which Paladin would acquire, by way of assignment, ProStrakan’s existing secured debt facility, with the addition of certain conversion rights, and will be granted an exclusive licence to ProStrakan’s products for certain emerging territories (TPL December 20, 2010).