A privately owned rare diseases drugs company based in Cambridge has launched a $466 million hostile bid for a New York-listed rival.

In an unusual takeover attempt in the sector, Cycle Pharma has gone directly to shareholders of Vanda Pharmaceuticals with a $8-a-share cash approach.

Cycle was founded in 2012 by James Harrison, 50, a former investment banker and private equity executive, who remains its chief executive and retains more than half of the share voting rights.

The company has offices in the global life sciences hubs of Cambridge in Britain and Boston in the United States. It employs 120 people, just under half of them in Britain. It has six marketed products, with treatments focused on neurological, rare metabolic and rare immunological conditions, most of which are genetic. It generated core operating profit of $40 million last year on revenue of $109 million.

Cycle said that it had made its takeover proposal to the board of the Nasdaq-listed Vanda on May 24. The approach was made on the same day that Vanda rejected a separate, sweetened unsolicited approach from Future Pak of $7.75 per share. The company said its offer had been pitched at a 98 per cent premium to Vanda’s closing share price on April 16, the day before an initial $4.05 approach from Future Pak.

The British business said it would have “preferred to reach an agreement privately”, but was going public with its proposal “to encourage Vanda shareholders to express their views on this proposal to the independent directors of Vanda”.

It added: “Cycle’s proposal represents a better outcome for shareholders, who would receive all-cash upfront value exceeding that of Future Pak’s cash portion of its latest offer announced May 7, 2024. It would also benefit patients, as Cycle has a proven commercial strategy in the US, a strong distribution footprint and an established track record of delivering medicines and individualised support to patients suffering from conditions with high unmet medical need.”

Vanda, which is based in Washington DC, responded, confirming the “unsolicited, non-binding indication of interest”, which it would “carefully review and evaluate”.

⬤ GSK, one of Britain’s biggest drugs companies, has announced its latest bolt-on acquisition, acquiring Elsie Biotechnologies, a San Diego-based private biotechnology company, for up to about £39 million. Tony Wood, chief scientific officer at GSK, said: “By bringing together Elsie’s expertise and our internal capabilities, we can design and develop oligonucleotides [which modulate gene expression] for difficult-to-treat diseases of scale with larger patient populations.”