20 May 2011
Japanese pharma company Takeda is to acquire Swiss-headquartered rival Nycomed for 9.6 billion. If the antitrust authorities give the go-ahead, the takeover should be completed by late summer.
Takeda has a strong presence in its home market and the US, and the acquisition will give it an expanded presence in Europe and the all-important high-growth emerging markets, where Nycomed has a good market share.
The deal also expands its product portfolio into the respiratory area with Daxas (roflumilast), which Nycomed obtained when it bought German company Altana in 2006. This treatment for chronic obstructive pulmonary disease - common in long-term smokers - has good growth potential, both in chronic obstructive pulmonary disease and potential future indications such as asthma.
According to Nigel Borshell, director at consultancy PharmaVentures, the deal looks quite expensive at more than three times annual sales, and Nycomed has debts of 5.5 billion. However, the patent on Takeda's biggest selling product - anti-diabetes treatment Actos (pioglitazone) - will soon expire, and Nycomed's annual sales of around $4 billion are about the same as the drug's.
'This is a strategic purchase rather than a financial one,' he says. 'Takeda is very focused as a big Japanese pharma company, not a global player, and this will give strength in Europe, and the strategic long-term growth potential to sell Takeda's products alongside Nycomed's in these territories and maintain growth levels.'
Another factor, he says, is that Takeda has more than $9 billion in the bank. 'In the current market, that doesn't give much return, so buying a company that will generate sales in new market areas and move it close to the world's top 10 pharma companies makes a lot of sense,' he says. 'It's difficult to work out exactly what the deal might be worth to them - it's more than just multiplying the sales. There's a 1+1=3 formula that says not to worry too much about the amount you pay - the strategic advantages over the long term are more important.'