Takeda's Global Ambition
Takeda Pharmaceutical's drug business started out manufacturing and selling bismuth-the basic ingredient in Pepto-Bismol--in 1895. A century later, it's still chained to the stomach-settling game with Prevacid, a $1.4 billion drug whose patent will expire in 2009, taking with it a huge percentage of Takeda's earnings. That's one big reason why Japan's largest and most international pharmaceutical company is on a US-focused dealmaking tear. Since February, Takeda has inked three major licensing partnerships and completed the largest acquisition in its history in a desperate attempt to shore up a thin pipeline.
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With the acquisition of Nycomed, Takeda’s long-standing strategy for becoming a world-class pharma has come into focus. The company spent much of the past decade building up its pipeline, globalizing R&D and importing Western staff, assets, platforms and processes. It also began a hectic period of M&A unparalleled among Japanese companies, culminating in 2011 with its acquisition of Nycomed. Now its focus will need to shift from big acquisitions and organizational makeover to execution.
Takeda Pharmaceutical Co.'s $13.7 billion purchase of privately held Nycomed International Management is undoubtedly pricey, at over three times the Swiss group's 2010 revenues. But because it satisfies a number of strategic and financial imperatives, the deal - Takeda's largest ever - may be worth the cost.
Japanese drugmaker Astellas Pharma's painstaking pursuit of OSI Pharmaceuticals is officially over. The victory came at a price, however, costing $4 billion, about $500 million more than Astellas' original hostile bid, launched in late February. That Astellas and OSI managed to find a path forward isn't surprising. Both companies had too much at stake not to see the merger come to fruition.