Japan’s Otsuka Pharmaceutical Co is paying $200 million in cash to acquire the rights to PDL BioPharma’s oncology drug IV Busulfex as the latter firm starts the sale of its key assets.

When the deal closes in the first quarter of next year, Otsuka will get hold of Busulfex (busulfan), which is approved for use in combination with cyclophosphamide as a conditioning regimen prior to bone marrow transplants for chronic myelogenous leukaemia. It is PDL’s second biggest-seller and in the 12 months ended September 30, IV Busulfex revenues were $29.4 million, a near 30% increase over the like, year-earlier period. It is sold in more than 40 countries.

The reason PDL is selling is that the firm, which was known as Protein Design Labs until last year, has failed to make any money since it splashed out $500 million on EPS Pharma in 2005 and peeved investors are demanding some sort of return. In response, the company announced in October that it would “actively pursue the sale of its key assets”.

This includes the sale of the whole company and its three marketed products, namely Busulfex, the antihypertensive Cardene (nicardipine), PDL’s best-seller, and Retavase (reteplase) for the management of acute myocardial infarction. In a research note, brokers at Lazard Capital Markets said the $200 million was more than they expected and praised PDL for doing the deal.

Selling these products at a high price will make PDL more of a pure biotechnology concern again and give a much-needed boost to its coffers, analysts have said, and this could create interest from a potential buyer.

As for Otsuka, Tatsuo Higuchi, president and representative director, said it accelerates the firm's global oncology business. He added that the company is currently developing “first-in-class oncology drugs in the USA”, including treatments for severe cancer pain (in Phase II), along with oral mucositis and leukaemia (Phase I).

As for the price tag, it may not prove to be so steep given that Otsuka can look to the fact that Busulfex has US marketing exclusivity until 2014 and is still enjoying prescription volume growth.