Japan's biggest drug maker to expand in the US
20 Mar 2008
Tokya: Takeda Pharmaceutical, Japan's largest drug maker has plans to spend around $5 billion to acquire Abbott Laboratories stake in their 50-50 US venture, TAP Pharmaceutical Products.
The buyout would add strength to Takeda's US sales operations, while being the biggest overseas acquisition by a Japanese drug firm.
As the Japanese drug market is not really displaying growth, Japanese pharmaceutical companies are looking overseas to enhance their foreign presence, and balance sheets, by tapping into the world's biggest drug market.
Reports in the media indicate that Takeda is in favour of making TAP a wholly-owned subsidiary by investing around ¥500 billion, or $5 billion, and would like to see the transaction completed by the end of the year.
Takeda has reportedly been looking at taking over the reigns of TAP since over 10 years, but couldn't agree with Abbott over price, until now.
The company had earmarked $10 billion for major investments including acquisitions, and analysts believe that the $5 billion it is paying for TAP is a little over the top. Analysts prefer to look at it as closure of a long standing issue, which now sets the company free to pursue other matters.
TAP's main product is the heartburn drug Prevacid. The company reported sales of around $1.5 billion in the six month period between April to September 2007. The Prevacid patent is due to expire in about a year, even as TAP is seeking approval for the release of a modified version of the drug that the company thinks will fend off generic competition.
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