Takeda Pharmaceutical is buying Nycomed for €9.6 billion (about $13.6 billion) in cash on a cash-free, debt-free basis. The deal, which is still subject to antitrust clearance, excludes Nycomed’s U.S. dermatology subsidiary, which will detach itself from Nycomed and continue to operate as a standalone business.
Announcement of the agreement ends press speculation that the firms were in takeover talks, and comes just 24 hours after Takeda put out its second statement in less than a week worded to refute the media's projections of a potentially $14 billion deal—but not to specifically deny that acquisition talks were under way.
Acquisition of Nycomed will add about €2.8 billion (roughly $4 billion) to Takeda’s cash flow in the form of Nycomed revenues (excluding the U.S. dermatology business), including sales from the roflumilast chronic obstructive pulmonary disease (COPD) franchise, which Takeda expects to represent a major source of revenue growth.
The Japanese firm claims acquisition of Nycomed fits in with its mid-term growth strategy. Takeda’s existing strengths are in its home and U.S. markets, whereas Nycomed has a major presence in Europe and high-growth emerging markets. Taking over the Switzerland-based firm will effectively double Takeda’s European sales, states CEO Yasuchika Hasegawa. The firm has also been aware that generic versions of its blockbuster diabetes drug, Actos, will potentially hit the market in 2012 and significantly dent its own revenue stream.
Meanwhile, Takeda has been making moves to expand its own presence in China. In March the firm announced establishing a holding company in China to enhance its business structure in the country, coupled with plans to significantly expand its Chinese sales force. As well as administrative functions, Takeda (China) Holdings will be responsible for assessing the feasibility of and implementing strategies for future business expansion in China.
Nycomed’s product range is focused on branded medicines in gastroenterology, respiratory, and inflammatory diseases, pain, osteoporosis, and tissue management, together with OTC products. Its clinical pipeline includes partnered and in-house candidates for diseases including osteoporosis, gastroenterology, and respiratory/allergic indications, pain, and inflammatory disorders including rheumatoid arthritis.
Nycomed’s R&D is conducted at three sites in Europe and one in India, providing a source of new development programs. The firm operates 15 manufacturing sites including five centers of competence in Europe for global products and 10 production sites for regional products in fast-growing countries, for example Brazil and Mexico. A major investment is in addition being made in a new pharmaceutical plant in Russia, which Nycomed says currently represents its biggest single market.
The firm’s continued push into emerging markets was given a significant leg-up in September, following the acquisition of a 51.34% ownership interest in Chinese firm Guangdong Techpool Bio-Pharma. In February this year Nycomed signed an agreement for the acquisition of Colombia-based Laboratorios Farmacol to increase its presence in the Latin American region.
Nycomed’s expected major growth driver, Daxas® (roflumilast), is an orally administered, selective phosphodiesterase 4 (PDE4) enzyme inhibitor for the treatment of COPD. The drug has been launched in a number of European countries (EU approval was granted in July 2010), and in some territories will be jointly marketed by Merck & Co’s MSD operation outside the U.S. Earlier this month Nycomed and Almirall announced a co-branding agreement for the commercialization of roflumilast in Spain.
Roflumilast was approved by FDA at the end of February 2011, and will be launched in the U.S. (trademarked Daliresp™) by Nycomed’s partner Forest Laboratories. Daxas generated a net turnover of €3.8 million (about $5.4 million) in 2010.