Japan’s Otsuka Pharmaceutical Co is to acquire Astex Pharmaceuticals in a deal valued at  $886 million.

Otsuka will acquire all of the outstanding shares of Astex for $8.50 per share in cash representing a 48% premium to the average closing stock price for the prior 30-day period. The principal attraction of Astex lies in Dacogen (decitabine) which is approved for myelodysplastic syndromes and was also recentlygiven the green light in Europe for the treatment of acute myeloid leukaemia in patients over 65.

In terms of pipeline, Astex's lead clinical development candidate is SGI-110, a potential best-in-class subcutaneous hypomethylating agent which is being evaluated for a variety of haematological and solid tumour oncology indications, including MDS, AML, ovarian and liver cancers. It is also developing AT13387, a second-generation HSP90 inhibitor for the treatment of prostate and lung cancers.

Astex also has five partner-funded programmes that are being developed by Novartis, AstraZeneca, Janssen and has a clinical development partnership with Cancer Research UK.

Taro Iwamoto, Otsuka’s president, said: "I hope that this acquisition of Astex will strengthen not only our cancer portfolio but also our drug discovery research in the central nervous system field”. He is especially excited about getting hold of Astex's fragment-based drug design technology at its Cambridge, UK research headquarters and its California clinical oncology R&D department.