Takeda said to approach Nycomed to gain emerging-market sales
Takeda Pharmaceutical Co., Asia's largest drugmaker with operations in Deerfield, approached closely held Swiss competitor Nycomed about a possible takeover, said three people with knowledge of the situation.
The negotiations are at an advanced stage, said the people, who declined to be identified because the discussions are private. Takeda may pay more than 8 billion euros ($11.4 billion), said one person, while Nycomed may seek more than 10 billion euros, according to another. There's no agreement yet and the talks could fail.
Nycomed, a Zurich-based company controlled by Nordic Capital and Credit Suisse Group AG's private-equity unit, would broaden Takeda's reach in emerging markets and add products for heartburn and smokers' cough. Takeda will focus on medicines for unmet needs and tapping new markets as blockbuster pills become harder to find, President Yasuchika Hasegawa said yesterday. The Osaka-based company sells most of its drugs in Japan and the U.S.
“Takeda was slow to expand its business in emerging markets,” said Hiroshi Tanaka, an equities analyst at Mizuho Securities Co., in a telephone interview today. “The deal would give Takeda a chance to diversify, and that would be valuable.”
Takeda expects profit to reach a 13-year low by 2014 as generic competitors of its best-selling diabetes pill Actos erode sales. The stock declined 1.4 percent to 3,870 yen at the 3 p.m. close of trading on the Tokyo stock exchange. The benchmark Topix index shed 1 percent. The shares have decreased 3.1 percent this year.
A deal may be announced as soon as next week, according to one of the people. Deutsche Bank AG is advising Takeda, another person said.
The Japanese drugmaker, which had 874.2 billion yen ($10.8 billion) in cash, deposits and short-term investments as of March 31, may seek mergers and acquisitions to spur growth, it said yesterday.
An acquisition at 8 billion euros or more would be Takeda's biggest ever and the largest for a Japanese pharmaceutical company, according to data compiled by Bloomberg. The drugmaker, which traces its origins to a medicine wholesale business opened in Osaka in 1781, bought Millennium Pharmaceuticals Inc. for $8.9 billion in 2008.
“Takeda doesn't comment on rumors about business development activities,” Elissa Johnsen, a spokeswoman for the company in Deerfield, Illinois, said yesterday. Tobias Cottmann, a spokesman for Nycomed, also declined to comment.
Nycomed earned 774.9 million euros before interest, taxes, depreciation and amortization last year. It sells pantoprazole for heartburn and the smokers' cough drug roflumilast, which is sold in the U.S. as Daliresp and in Europe as Daxas. Daliresp sales are shared with Forest Laboratories Inc. in the U.S. The Swiss drugmaker's main markets are Russia, Brazil, Germany, Italy and Spain.
Emerging economies accounted for 39 percent of its 3.17 billion euros in revenue last year. The Swiss manufacturer aims to increase that proportion to 60 percent by 2015, Chief Executive Officer Hakan Bjorklund said in an interview in March.
The Swiss drugmaker agreed in February to buy Laboratorios Farmacol SA of Colombia and in November said it had bought a majority stake in Chinese biotechnology company Techpool Bio- Pharma Co.
Takeda generated 86 percent of its 1.4 trillion yen of revenue in Japan and North America last fiscal year.
“Finding blockbusters is becoming difficult and we are forced to focus on more, smaller products,” Hasegawa said at an earnings briefing in Tokyo yesterday. To bolster growth, Takeda will seek drugs for “unmet needs, increase our presence in developing countries and cut costs,” Hasegawa, 64, said.
Nycomed has about 12,500 employees, four research and development centers in Europe and India, and 15 production facilities and two joint ventures in 13 countries, according to its website.
Nordic Capital, based in Stockholm, owns 41 percent of Nycomed, while Credit Suisse's DLJ Merchant Banking unit holds 26 percent, according to the company's website. London-based Coller Capital has a 9.7 percent stake and New York-based Avista Capital Partners owns 8.9 percent.
Nycomed was founded in Norway in 1874 by pharmacist Morten Nyegaard as an agent for imported pharmaceutical products. The company has changed hands repeatedly over the past 12 years, moving in the process from Norway to Denmark and then, in 2007, to Switzerland.