BREAKING: Otsuka to Acquire Methylone Drug Developer Transcend in $1.23B Deal

While it does purport to be developing ‘next-generation analogs’, Transcend is effectively a methylone drug developer, with its lead candidate (TSND-201) under investigation for PTSD, generalised anxiety disorder (GAD), and major depressive disorder (MDD). Methylone is an analog of MDMA.

TSND-201 for PTSD is the most developed of these programs, with the company reiterating in February that it is “actively preparing to initiate its Phase 3 clinical program.”

That comes, of course, after the company shared topline results from a Phase 2 study in March 2024 (see Transcend Posts Positive Phase 2 Data from Methylone for PTSD Program). At the time, we noted that the cut of data was impressive and suggestive that its methylone candidate might be in the same ballpark as Resilient’s (fka Lykos) MDMA for PTSD, with the usual caveats that cross-study comparisons are dicey.

Aside from its trial results, the company has sought to differentiate itself from Resilient and MDMA, and from psychedelics and hallucinogens, more generally.

Indeed, as we reported in Bulletin 221, the published Phase 2 study, which appeared in JAMA Psychiatry last month, included black-box redactions throughout the Clinical Study Protocol and Statistical Analysis Plan. It appeared, Tactogen CEO and entactogen researcher Matthew Baggott noted, that those redactions concealed “the 5/11D-ASC and another end-of-session measure.” Baggott speculated that the company did this for competitive reasons.

But as we also reported in that Bulletin, some people familiar with the company’s trials have suggested it might be downplaying the subjective effects associated with the drug. Data from scales like the altered states of consciousness would have been informative in this regard.

Even still, dosing sessions in that Phase 2 program were at least eight hours long, with the drug having a half-life of around six hours. The protocol also called for four once-weekly dosing sessions, meaning there were at least 32 hours of monitoring required across the doses.

Just what the Phase 3 program might look like is unclear, but many will be watching to see the number of doses, their frequency, and the monitoring intensity. 

The terms of the deal see Otsuka set to pay $700M upfront, with a further $525M contingent on the achievement of sales milestones. That brings the total potential consideration to $1.225B, Otsuka says.

That is, of course, very similar to the AbbVie-Gilgamesh deal, which featured an up-front payment of $900M with a further $300M in biobucks. 

Otsuka is an unsurprising suitor for a drug developer in this field. As we have noted previously, the company was an early investor in psilocybin drug developer Compass Pathways, acquired Mindset Pharma in 2023, and has since been milling around the space. In December, it publicly signalled its work on “psychedelic-inspired” CNS compounds, which it described as “novel serotonergic agonists”, as we covered in Bulletin 216.

The deal is expected to close in Q2.