Otsuka Pharmaceutical has signed a definitive agreement to acquire drug discovery-based research and development company Mindset Pharma in an all-cash deal worth C$80m ($59.1m).

The deal will be executed through Otsuka subsidiary Otsuka America (OAI).

Mindset focuses on researching and developing therapies for treating psychiatric and neurological ailments with high unmet needs.

The takeover is part of Otsuka’s strategy to bolster its pipeline in psychiatric and neurological disorder areas.

Mindset will function as a wholly owned OAI subsidiary.

Otsuka subsequently plans to develop new 5-HT2A agonists in North American and European regions.

Otsuka Pharmaceutical president and representative director Makoto Inoue stated: “Otsuka Pharmaceutical has designated psychiatry and neurology as one of its top priority therapeutic areas and has been developing antipsychotic agents with clinical significance on a global basis.

“With the addition of Mindset’s novel compounds and synthesis processes, we expect this acquisition will further contribute to the treatment of patients suffering from psychiatric disorders.”

The acquisition has received approvals from the boards of directors of both companies.

The deal will conclude in the fourth quarter of 2023.

An Otsuka affiliate, the McQuade Center for Strategic Research and Development, and Mindset signed a co-development deal in January 2022. This collaboration was intended to support Mindset’s research and development of a class of agonists that can trigger the serotonin 5-HT2A receptor.