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Takeda takes on transformation
ZURICH, Switzerland—Setting its sights on high-growth, emerging markets in Europe, Japanese pharma Takeda Pharmaceutical Co. Ltd. has acquired Nycomed AS, a privately owned pharma based here, for $13.7 billion on a cash-free, debt-free basis.
Takeda, which has a strong presence in Japan and the United States, was attracted to Nycomed's significant business infrastructure in Europe, and says that bringing Nycomed into its growing global fold will enable it to become "a truly global pharmaceutical company with a diversified talent base capable of conducting global business effectively." That goal is part of Takeda's "2011-2013 Mid-Range Plan (MRP)," a growth strategy aimed at enhancing the company's regulatory development expertise and commercialization capability.
Elaborating on the rationale for the acquisition, Elissa J. Johnsen, a spokeswoman for Takeda Pharmaceuticals North America Inc., says the strategy also includes "expanding geographic coverage into markets with higher growth, and enhancing Takeda's existing presence in each one of the countries and regions."
"The acquisition of Nycomed enables Takeda to cover 98 percent of the global pharmaceutical market," Johnsen adds. "It also brings to Takeda top-line growth and strong cash flow generation. Takeda is committed to discovering innovative drugs and keeping its forecast and R&D spending over the MRP plan. Additionally, given the
enhanced global marketing, sales and regulatory expertise of the combined company, Takeda becomes a much more attractive licensing partner."
Under the terms of the acquisition agreement, Nycomed will become a wholly owned subsidiary of Takeda. The transaction has been unanimously approved by both companies' boards of directors, and subject to antitrust clearance, it is expected to close by the end of September.
Nycomed's long history of milestones dates back to its founding as Foundation of Nyegaard & Co. in 1874. Today, Nycomed ranks 28th among global pharmaceutical companies, and its diverse product range focuses on branded medicines in gastroenterology, respiratory and inflammatory diseases, pain, osteoporosis and tissue management. A range of over-the-counter products completes the portfolio. According to the company's website, new products are sourced in-house and in-licensed from external companies such as small biotechs. Nycomed counts Merck & Co. Inc. and Forest Laboratories as two of its most important partners.
Currently, Nycomed has three Phase I programs in development: A small-molecule PDE4 inhibitor for both inflammation and respiratory conditions, as well as a monoclonal antibody for inflammation. Two Phase II programs are underway: Veltuzumab for inflammation and rheumatoid arthritis and Saber-bupivacaine for incisional pain. Nycomed also has three Phase III programs in its pipeline: An alendronate effervescent for osteoporosis; teduglutide for gastroenterology and short bowel syndrome; and ciclesonide HFA nasal for respiratory conditions and allergic rhinitis.
The acquisition doesn't include Nycomed's U.S. dermatology business, which Takeda said didn't offer synergies with its own operations.
In 2010, Nycomed's total net turnover reached $4.6 billion, with an adjusted EBITDA of $1.2 billion.
"The combination of Takeda's successful track record of innovation with Nycomed's efficient commercialization and manufacturing infrastructure will create a global player with a phenomenal ability to bring medicines to patients and healthcare providers around the world," said Håkan Björklund, CEO of Nycomed, in a statement announcing the deal. Nycomed deferred requests for comment on the deal to Takeda.
Nycomed employs 12,500 associates worldwide and has affiliates in more than 70 countries. Research and development is conducted at three sites in Europe and one in India. Nycomed also has 15 manufacturing sites: five centers in Europe for global products, as well as 10 production sites for regional products in fast-growing countries such as Brazil and Mexico. A major investment is being made in a new pharmaceutical plant in Russia, currently Nycomed's biggest single market. Takeda said it cannot comment on how the acquisition will affect these employees and facilities until after the deal closes.
Many analysts have noted that both Takeda and Nycomed face lackluster development pipelines and increased competition from generic drugmakers. This month, Takeda reported that earnings fell 17 percent in its latest fiscal year, hurt in part by expiring patents on its ulcer drug Prevacid, while sales of Nycomed's biggest product, pantoprazole, fell 27.8 percent last year. Overall, Nycomed reported a loss of $328 million in the last fiscal year, compared with a profit of $332 million in the previous year.
Other analysts have been especially vocal about the deal 's price tag, saying it may be overpriced, considering that some shareholders may be getting nervous about recent high-figure deals.
"The target is appropriate if Takeda's main objective is to expand its reach in emerging markets. Even then, it does leave an impression that the price paid cannot be justified if it is only to secure a sales channel," J.P. Morgan analyst Masayuki Onozuka told the Wall Street Journal.
Takeda and Lilly ink marketing agreement in Asia
SEOUL, Korea—Takeda Pharmaceutical Company Ltd. also announced last month that it has entered into an exclusive partnership with Eli Lilly & Co. to market Evista, an approved treatment for osteoporosis in postmenopausal women, in seven Asian markets.
Haruhiko Hirate, senior vice president of Takeda's international operations, said in a statement that the company enhances its business in Asia, "which is one of our main focus, by various initiatives including strengthening of sales structure. This partnership with Lilly offers the potential for Takeda to accelerate our business in this region."
Under the agreement, the companies will market Evista in Korea, Hong Kong, Macau, Malaysia, the Philippines, Singapore and Thailand. Evista is approved and marketed for the treatment and prevention of osteoporosis in postmenopausal women in these territories, and for breast cancer risk reduction in Philippines, Singapore and Thailand.
Marketing and distribution rights of Evista will be transferred to Takeda. Lilly will receive an unspecified cash payment from Takeda. Lilly also retains patent ownership.
"This agreement is good for our customers, including patients and physicians, because Takeda intends to commit additional resources to support Evista in affected markets in Asia," said Eberhard Ludewigs, vice president of Lilly's Amerasia operations, in a statement. "The agreement also provides Lilly guaranteed income and gives us the opportunity to invest further in diabetes, oncology and neuroscience."