Court approves Otsuka’s bid to buy Proteus for $15M

Once valued at $1.5 billion, Proteus Digital Health may now sell to its largest shareholder for $15 million in cash. A Delaware bankruptcy court approved Otsuka Pharmaceutical’s bid to acquire Proteus on Thursday, despite complaints from other shareholders that the deal was “nothing more than a giveaway.”
Proteus, which was founded in 2002, developed a tiny sensor that could be embedded in pills to track adherence. It had struck a licensing agreement with Otsuka, and the companies received FDA approval three years ago for the first medication with an embedded sensor: an antipsychotic medication called Abilify MyCite.
But in the last year, Proteus faced a cash crunch, after failing to close an expected $100 million funding round. The medication’s $1,650 price tag might have been hard to swallow, coupled with limited evidence that it improved adherence.
 Proteus filed for bankruptcy in June. Later that month, Otsuka filed its $15 million “stalking horse” bid for Proteus, setting the pace for a future auction. Since no other bidders emerged by the Aug. 4 date, Otsuka’s prevailed. But a group of shareholders representing a 16% stake in Proteus, including Novartis and two investment firms, called for increased scrutiny of the deal. According to court documents, Otsuka holds about 19.8% of Proteus’ outstanding senior preferred notes and 10% of all of its outstanding equity.
They said they hadn’t placed a bid because they needed more time to evaluate the deal.
“The process was flawed from the beginning. The timeline was too short for third parties to make meaningful bids on highly specialized assets during a pandemic,” they wrote in their objection.
Now, with the court’s approval, Otsuka will be able to integrate Proteus’ business with its own. The drugmaker didn’t share its plans for the technology, but it continues to market Abilify MyCite, and previously stated that it “…remains committed to building a successful digital healthcare business that includes digital medicine as well as digital therapeutics.”

Original Article: (https://medcitynews.com/2020/08/court-approves-otsukas-bid-to-buy-proteus-for-15m/)