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12:00 AM
May 23, 2011
 |  BioCentury  |  Strategy

Takeda's global boost

Nycomed globalizes Takeda, but Japanese pharma needs more to regain peak value

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.

Tumbling down

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 in 2009 and two in 2012.

On Takeda's FY06 earnings call on May 11, 2007, Hasegawa singled out three late-stage compounds as critical to the company's near-term future: lapaquistat (TAK-475), a squalene synthase (SQS; FDFT1) inhibitor for hypercholesterolemia; alogliptin (SYR-322), a dipeptidyl peptidase-4 (DPP-4) inhibitor for diabetes; and dexlansoprazole, a proton pump inhibitor (PPI) for gastroesophageal reflux disease (GERD).

While dexlansoprazole was approved as Dexilant in the U.S. in 2009, the other two products have not fared as well.

In October 2007, FDA requested another trial of lapaquistat prior to submission of an NDA, and recommended suspending clinical studies of higher doses of the compound because of elevated transaminase. Takeda's market cap dropped $7.9 billion (13%) to $54.9 billion the next day. The company ended up dropping the compound in early 2008.

Alogliptin was approved as Nesina in Japan in 2010, but Takeda does not expect U.S. approval until FY12, with EU approval in FY13.

Takeda submitted an NDA for alogliptin to FDA in 2007, but that compound has been delayed largely due to the Avandia rosiglitazone controversy. Alogliptin received a complete response letter from FDA in 2009 requesting a cardiovascular safety trial to meet requirements set out in December 2008 guidance on developing diabetes treatments.

The Millennium acquisition in 2008 was supposed to add near-term revenues for Velcade bortezomib for multiple myeloma (MM) and mantle cell lymphoma (MCL), and to provide a pipeline that could fuel sales growth in the mid-term (see BioCentury, April 14, 2008).

The line extensions haven't come quickly. At the...

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