What is Astellas Pharma, the purchaser of Ocata?

Fish eating fish

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Astellas Pharma is on track to purchase Ocata Therapeutics (formerly Advanced Cell Technology).

This has stirred a lot of strong feelings amongst investors in Ocata.

I’ve also been wondering what exactly is Astellas Pharma?

Astellas is a giant compared to Ocata with reportedly $11 billion USD in revenue and $1.3 billion in profit just in the year 2013 alone. While Ocata was worried about a few million dollars here or there, Astellas operates in the billions.

Not only that, but Astellas is just part of a much larger entity called Mitsubishi UFJ Financial Group, which has more than $2 trillion (yes, with a T) in holdings. So you almost have to imagine one of those drawings with increasingly bigger fish eating smaller and smaller fish. Mitsubishi UFJ is a blue whale to Ocata’s minnow.

There are many unanswered questions at this point.

Some have pointed out that this is a Japanese company buying an American biotech that has received NIH funding. Should there be special considerations in a case like that? I’m not aware of that issue playing a significant role in past purchases of this kind.

Will this purchase provide an influx of much needed financial support to Ocata’s pipeline and in the end help patients? Or could Ocata’s work get lost inside the whale? Time will tell.

11 thoughts on “What is Astellas Pharma, the purchaser of Ocata?

  1. I think the main catalyst for this acquisition is the new Japan regenerative medicine laws that make it much easier to get a stem cell therapy to the market WITH reimbursement from the health care system. A much quicker path to profitability.

  2. I would like to think that biomedical research is not an international competition where countries fight to see who gets to treat their citizens. Research paid by the Japanese taxpayer also benefits American patients. And it shouldn’t be difficult to find an American company that has also profited from it. By the way, this is coming from a scientist who is a resident for tax purposes in the US and yet ineligible for NIH funding because of his citizenship status.

  3. Note that this is not the first time that a large Japanese company has acquired a US regenerative medicine company- Fujifilm Holding’s acquisition of Cellular Dynamics earlier this year for ~$300 million comes immediately to mind. Cellular Dynamics’ product development seems to be doing well after the acquisition, as they have just made a pretty big deal with Roche for Roche to use their iPS cell products for drug screening and discovery.

    I would imagine that Astellas similarly acquired Ocata out of an already-existing interest in pushing cell therapies to market- note that they established a dedicated cell therapy division last year and have previously partnered with Cytori for development of ASCs. Therefore, I wouldn’t expect Ocata’s work to get “swallowed in the whale”, especially considering that Ocata is well known as a leader in the field and that their mission seems to be aligned with Astellas’. If anything, rather than swallowing Ocata and diverting their pipeline, I would expect Astellas to showcase Ocata to help Astellas’ cell therapy/regenerative medicine branding (I think that this is what Fujifilm is doing with Cellular Dynamics).

    As for a Japanese company buying an American biotech that has received NIH funding- the Bayh-Dole Act lets companies keep ownership of intellectual property developed using government funding. Thus, Ocata would own any such intellectual property, not the government, although the government has certain rights. The intellectual property is not a national security interest. Therefore, there really shouldn’t be anything substantially different about the sale of Ocata to a foreign company compared to the sale of any other American business to a foreign company.

  4. ASTELLAS is buying OCATA for peanuts. The shareholders are literally getting violated. On investorstemcell.com, they are discussing uniting and not tendering their shares. There are already 3 law firms wanting to investigate the fairness of the sale and also if OCATA properly shopped around to other potential buyers. The promises made by OCATA management have been recorded at presentations, conferences and CC updates. There are transcripts. This is not going to go easy, especially at $8.50 a share which is an insult to the shareholders. At this low price I would think that some of the huge BPs would easily jump in and offer at a minimum $50.00 – $70.00 a share just to start a bidding war. OCATA’s pipeline is going to change medicine as we know it.

  5. I do agree with Mario. . And I’m an ocata stockholder too. But I’m sorry to say That as a patient. .. I have no choice to be glad this is going to Japan. I think they’ve been moving too fast with ipsc research but for the ocata pipeline this will actually be appropriate.

  6. During World War 2 we had a group of scientists who invented a terrible technology.It killled thousands of people and remains a threat to humanity.Imagine if they had sold it to the highest bidder like Japan.
    Ocata has a new amazingly good technology that will benefit millions if not billions, and we are allowing it to be sold for a pittance.
    This is absolute stupidity and should not stand.

  7. Interestingly, my next door neighbor was involved in a class action lawsuit against Cytori, whom Astellas also purchased at a very low-ball offer. Guess I will have to call him and see how that worked out. He warned me about ACTC at the time because of what happened, and lo and behold, 3.5 years later I am in the same boat (probable class action lawsuit). Obviously Astellas has a history of doing this, sticking it to shareholders of the companies they purchase. Very interesting tidbit I learned here. Agree also with Mario, that management has been disingenuous (to say the least) to the shareholders who have kept this company alive. Crony capitalism at its best, Wotton bringing on his buddy Jooste from Antares to sell out the long shareholders of Ocata Therapeutics and pad their pockets, all the while devaluing this company. So much for fiduciary responsibility.

    As far as “no national security issues” at stake here, what about blood platelets? Lanza reported at Regen Med conference I attended in March 2013 that the likes of DARPA would be needed to fund the platelet program. So let me get this straight, the US has to purchase platelets (if developed) from Japan. Yikes!

    • @Edward & Patti,
      On the Ocata work being in the US or Japan issue…
      With the purchase of CDI by Fuji and now Ocata by Astellas, Japanese companies are showing their interest in and excitement about this area of regenerative medicine. There is clear some interest from pharma in the US in this arena too, but they haven’t been as active. Why not? I don’t know. J&J dropped some cash on this a while back: https://www.ipscell.com/tag/johnson-johnson-stem-cells/
      Also another thing comes to mind– many “USA” companies are really multinationals that produce their products overseas and then ship them back here.
      In this global economy, a lot of things are getting blurred.

  8. Apologies, looks like Astellas partnered with Cytori, not purchased outright like OCAT. I would have been fine with a partnering deal with them, but not this low-ball buyout. Maybe the class action lawsuit at Cytori had nothing to do with Astellas. Wanted to set the record straight.

  9. We are insane to allow the Japanese to buy Ocata’s IP portfolio and patents. Their science is just starting to revolutionize medicine and it will be worth hundreds of BILLIONS in the next five years. Billions that should stay here. There are over 15,000,000 people in the United States going blind or already blind from AMD. Imagine they could be treated for $10,000 per eye. That’s 300 BILLION dollars for the one single indication.

    Our FDA and general government apparatus is in thrall to religious nutcases. People are going BLIND!! As I said, it is insane for us to sell the national treasure that is Ocata.

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