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Takeda Pharmaceutical Company, Japan’s largest pharmaceutical company, yesterday announced its intention to purchase the Swiss drug maker Nycomed for 8 to 10 billion euros ($11.4-14 billion). While the deal is not certain to close, it signals Takeda’s intention to purchase its way into the US and European markets.

Takeda acquired Cambridge, MA-based Millennium Pharmaceuticals in 2008 for $8.8 billion, the largest foreign acquisition ever by a Japanese company. The Millennium acquisition was intended to bolster Takeda’s competencies in genomics and oncology drug discovery. If Takeda is successful in its bid, Nycomed would enhance the company’s standing in treatments for gastric, respiratory and inflammatory disorders. Nycomed has operations in roughly 70 countries, with Europe representing 50 percent of the company’s sale and emerging markets 38 percent.

Takeda’s chief executive officer Yasuchika Hasegawa has pursued an aggressive M&A strategy since assuming control of the company in 2003. Historically, Japanese drugmakers intentionally remained small and were content doing business in local and other Asian markets. However, Hasegawa has changed the “game” and has forced some of Takeda’s rivals to emulate his global strategy. To that end, in recent years Daiichi Sankyo Company has purchased Plexxikon and Ranbaxy and Astellas acquired OSI pharmaceuticals as part of a westward expansion.

While Takeda remains Japan’s largest pharmaceutical company, net profit slumped 17 percent last year and the company is losing patent protection for its largest selling drugs, Prevacid (ulcers) and Actos (diabetes). Like Takeda, Nycomed sales are being hit by the loss of patent protection for its largest selling drug Protonix (antacid). Worldwide sales of the drug plummeted by almost 28 percent. Therefore, it would appear that Takeda’s pursuit of Nycomed is based more on its pipeline rather than currently marketed products.

Stay tuned for late-breaking news on the deal!

Until next time,

Good Luck and Good Job Hunting!!!!!

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Takeda Pharmaceutical Co., Japan’s largest pharmaceutical manufacturer, announced that it has agreed to buy Cambridge MA-based Millennium Pharmaceuticals for $8.8 billion. Millennium, founded in 1993 by high profile MIT researchers and once heralded as one the most innovative American biotechnology companies, never lived up to analyst’s expectations. That said, the company did develop and win regulatory approval for an anti-cancer drug, Velcade, which is expected to garner additional approval for wider use in oncology later this year.

Velcade, which is used to treat relapsed multiple myeloma after other drugs fail generated more than $800 million last year. Millennium anticipates U.S. approval by June to promote Velcade as an initial therapy to treat these disorders. Millennium markets Velcade in the US and shares revenue with Johnson & Johnson which markets Velcade in 85 other countries. Analysts predict that the Takeda acquisition will help to propel Velcade to blockbuster status.

The Takeda-Millennium deal follows Eisai Co.’s (another Japanese company) agreement in December to buy the U.S.'s MGI Pharma Inc. for $3.9 billion as Japanese companies, aided by a weak dollar against the yen, seek growth abroad. Japanese companies have been hampered by government-ordered price cuts, weak pipelines and a lack of new products  As one financial analyst put it ``There's no doubt the weak dollar against the yen is making U.S. biotech very attractive right now to potential Japanese buyers,''

Takeda’s best seller is the diabetes drug Actos which is slated to lose patent protection in the near future. Acquisition of Millennium provides Takeda with an entrée into the oncology and cardiovascular markets both of which are poised for expansive growth in the next five years. Analysts also believe that the Millennium acquisition will boost Takeda’s drug discovery and development flow. Millennium is conducting human trials with experimental drugs for cancer, heart disease, gastrointestinal disorders and rheumatoid arthritis.

The ongoing acquisition of American biotechnology companies by Japanese pharmaceutical companies reminds me of  the Japanese foray into the US real estate market in the early 1990s. Only time will tell whether the Japanese will be able to hang on to their acquisitions this go around (they weren’t the last time).  Earlier this week, Switzerland's Novartis AG agreed to buy 77 percent of eye-care company Alcon Inc. in a two-step transaction totaling $39 billion. Does anybody else see a troubling trend developing here as a result of the recession that we are in or heading into?

Don’t be surprised to see some “asset reallocation” and downsizing at Millennium. The Japanese are well recognized for increasing efficiency and work output with smaller numbers of employees.

Until next time….

Good Luck and Good Job Hunting (not in Cambridge MA)!!!!!!!!

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