Acquiring Nycomed will transform Takeda Pharmaceutical Co. Ltd. into a complete global pharma company by combining geographically complementary marketing operations. But the Japanese pharma will need more acquisitions to get its market cap back to its $60 billion-plus heyday in 2007.
Takeda's market cap has been in decline since 2007 as the company's key products approached the ends of their patent lives and intended replacements failed to reach the market (see "Takeda Chronicles," A12).
Prior to announcing the Nycomed deal, Takeda's market cap was ¥3 trillion ($36.7 billion), which is where the company closed last Friday.
Takeda attempted to plump up its cancer and gastrointestinal R&D with its acquisition of Millennium Pharmaceuticals Inc. for $8.8 billion in 2008. But the pharma now says the earliest any of Millennium's pipeline products could reach the market would be FY14.
Thus Takeda was willing to pay €9.6 billion ($13.6 billion) net of cash and debt to acquire Nycomed for the opportunity to expand into emerging markets and to get access to chronic obstructive pulmonary disease drug Daxas roflumilast, President and CEO Yasuchika Hasegawa said on a conference call last week.
The deal could help shore up declining sales in the near term, but analyst models suggest returning Takeda to its former heights will require more acquisitions leveraged by its newly acquired global channels.
Takeda's sales peaked at ¥1.5 trillion ($15.7 billion) in FY08, which ended March 31, 2009. Sales dropped by 5% in FY09 and by another 3% to ¥1.4 trillion in FY10.
Meanwhile, three of the pharma's biggest drugs, which contributed to 53% of FY06 sales, were nearing the end of their patent lives: one