Takeda Pharmaceutical is acquiring the Swiss pharmaceutical Nycomed from its private equity owners in a cash deal valued at $13.7 billion (€9.6 billion), inclusive of Nycomed’s debt. It is the Japanese drugmaker’s biggest deal since its $8.8 billion acquisition of the U.S. cancer drug developer Millennium three years ago.
The deal is in line with Takeda’s recently announced sustainable growth strategy, designed to offset declining sales in Japan and boost revenue before the patent on its best-selling diabetes drug, Actos, expires. Actos accounted for 27 percent of the company’s 2010 revenue.
The Nycomed buy expands Takeda’s global reach beyond Japan and the United States, where it currently gets about 85 percent of its revenue, to Europe and emerging markets, which together made up 83 percent of Nycomed’s 2010 revenue of $4.5 billion (€3.2 billion). This will be crucial for revenue growth going forward as a recent released report from IMS Institute for Healthcare Informatics said drug sales in the 17 fastest growing emerging markets will increase 13 to 15 percent annually for the next five years, compared to a 1 to 3 percent annual growth in developed countries.
Nycomed has an established presence in Brazil and Russia and recently acquired a major stake in China’s Guangdong Techpool Bio-Pharma. Emerging markets account for more than half of its global pharmaceutical growth. The Swiss drugmaker’s portfolio includes both established prescription pharmaceuticals as the primary growth driver, and over-the-counter products.
Takeda expects major revenue growth to come from Nycomed’s roflumilast, a recently approved first-in-class treatment for chronic obstructive pulmonary disease, in addition to an immediate and stable increase in cash flow with Nycomed’s $4 billion (€2.8 billion) in annual revenue.
Nycomed’s U.S. dermatology unit is not included in the deal and will become an independent business owned primarily by its current private equity owners following Takeda’s takeover. Takeda expects the deal to be completed within the next three to four months, subject to antitrust clearance.
Analyst believe that Takeda is paying a premium for Nycomed. A Bloomberg analysis has found that Takeda’s takeover values Nycomed, including its dermatology business, at 11.3 times its adjusted earnings before interest, taxes, depreciation, and amortization last year. This compares with a median 8.6 times EBDITA paid by acquirers in drug company takeovers valued at $2 billion or more in the past two years, according to Bloomberg data.
Takeda was not the only company making a big buy this week. Just after closing its $2 billion acquisition of Dionex, a maker of instruments for water analysis, Thermo Fisher Scientific, the world’s largest maker of laboratory instruments, announced it will acquire Swedish specialty diagnostics firm Phadia for $3.5 billion (€2.47 billion) in cash from European private equity firm Cinven.
Phadia develops, manufactures, and markets complete blood test systems used to identify allergies and autoimmune diseases. Phadia has been a pioneer in bringing new allergy diagnostic tests to market and is the global leader for in vitro allergy diagnostics and a European leader in autoimmunity diagnostics. The deal is expected to close in the fourth quarter of 2011 and is expected to be immediately accretive to Thermo Fisher’s adjusted earnings per share.
U.K.-based Shire said it will acquire U.S. regenerative medicine company Advanced BioHealing for $750 million. The announcement came just before Advanced BioHealing was to price its shares for an initial public offering. At its expected mid-range, the company had an implied market value of $732 million, just below what Shire offered for the whole business.
Shire, known for its ADHD drug Adderall, was until last year primarily focused on neurology. Then it acquired newly public Movetis to expand into gastrointestinal medications. With the acquisition of Advanced BioHealing, Shire will establish a new business based on tissue regeneration using cell-based therapies. The deal gives it Dermagraft, regenerative bio-engineered skin substitute for the treatment of diabetic foot ulcers. Advanced BioHealing had already grabbed a 5 percent share of a potential $3 billion market and had U.S. sales of $146 million in 2010.
Not resting on its laurels from its recent $6.8 billion acquisition of Cephalon, Teva Pharmaceuticals expanded into the Japanese generics market with a majority stake in Taiyo Pharmaceutical Industry for $460 million in cash [see story]. Teva is also extending an offer to purchase all remaining outstanding shares of Taiyo, valuing Japan’s third largest generic pharmaceutical at $1.3 billion.
DEALS FOR THE WEEK ENDING MAY 20, 2011
| Global Venture Financings | |||
| Company | Location | Amount Raised (USD M) | Principal Activity |
| Cameron Health | San Clemente, CA | 107.0 | Medical devices |
| Neuronetics | Malvern, PA | 30.0 | Neurostimulation |
| VertiFlex | San Clemente, CA | 14.0 | Spine repair |
| SciFluor Life Sciences | Boston, MA | 5.0 | Tools/Technology |
| Gelesis | Boston, MA | 3.6 | Hydrogel for obesity |
| SironRX Therapeutics | Cleveland, OH | 2.3 | Wound care |
| Resolve Therapeutics | Seattle, WA | 2.0 | Autoimmune therapeutics |
| TransCorp | Byron Center, MI | 0.8 | Medical devices |
| Ostial Solutions | Kalamazoo, MI | 0.1 | Medical devices |
| NeuroHealing Pharmaceuticals | Newton, MA | N/A | Traumatic brain injury |
| MD On-Line | Parsippany, NJ | N/A | Electronic data solutions |
| MedTestDX | New York, NY | N/A | Diagnostics |
| Axelar | Stockholm, Sweden | 19.7 | Cancer therapeutics |
| Novate Medical | Galway, Ireland | 12.5 | Medical devices |
| Curetis | Germany | 5.5 | Diagnostics |
| Total Raised US | 164.8 | ||
| Total Raised Non-US | 37.7 | ||
| Grants and Contracts | |||
| Company | Funding Agency | Amount Raised (USD M) | Principal Activity |
| Contract | |||
| Siga Technologies | HHS BARDA over 5 years | 433.0 | Smallpox antiviral |
| Grant | |||
| Acadia Pharmaceuticals | NIH NINDS | 2.4 | CNS therapeutics |
| Total Grants and Contracts | 435.4 | ||
| Public Financings | |||
| Company | Ticker | Amount Raised (USD M) |
Financing Type |
| Shanghai Pharma (China) | HK:2607 | 2,000.0 | IPO in HongKong, already listed in China |
| MEDIAN Technologies (France) | Alternext:ALMDT | 14.3 | IPO |
| e-Therapeutics (UK) | LSE:ETX | 28.7 | Placing |
| e-Therapeutics (UK) | LSE:ETX | 1.4 | Warrant exercise |
| Benitec (Australia) | ASX:BLT | 8.5 | Rights issue |
| FluoroPharma | OTC:CEWM | 3.5 | PIPE |
| Antares Pharma | AIS | 20.0 | Follow on |
| Marina Biotech | MRNA | 6.9 | Follow on |
| Targacept | TRGT | 75.0 | Follow on |
| Celldex Therapeutics | CLDX | 36.2 | Follow on |
| ImmunoGen | IMGN | 84.0 | Follow on |
| Alkermes | ALKS | 450.0 | Loan to acquire EDT |
| Tranzyme Pharma | TZYM | 3.4 | Overallotment from IPO |
| VistaGen Therapeutics | Private | 3.9 | Financing prior to reverse merger with Excaliber Enterprises |
| Total Public Financings-US | 682.9 | ||
| Total Public Financings-Non-US | 2,052.9 | ||
| M&A | |||
| Acquirer | Target | Deal Value (USD M) |
Focus |
| Takeda Pharmaceutical (Japan) | Nycomed (Switzerland) | 13,700.0 | Biopharmaceuticals |
| Thermo Fisher Scientific | Phadia (Sweden) | 3,500.0 | Diagnostics |
| Shire (United Kingdom) | Advanced BioHealing | 750.0 | Regenerative medicine |
| Teva Pharmaceuticals (Israel) | Taiyo Pharmaceutical (Japan) | 460.0 | Generics |
| Stryker | Orthovita | 304.0 | Orthobiologics |
| Orphazyme (Denmark) | CytRx' non-core assets | 120.0 | Molecular chaperones |
| PerkinElmer | Labtronics (Canada) | N/A | Tools/Technology |
| Histogenics | ProChon Biotech | N/A | Tissue regeneration |
| InVentiv Health | PharmaNet Development Group | N/A | CRO |
| Rules-Based Medicine | Satoris | N/A | Biomarkers |
| Thermo Fisher Scientific | Sterilin (United Kingdom) | N/A | Tools/Technology |
| Ecron Acunova (India) | aCROnordic (Norway) | N/A | CRO |
| Ridgement Equity Partners | Gallus Biopharmaceuticals | N/A | CRO |
| Alliances | |||
| Company/Licenser | Company/Licensee | Deal Value (USD M) |
Focus |
| Glenmark Pharmaceuticals (India) | Sanofi (France) | 613.0 | Autoimmune drug license |
| Dainippon Sumitomo Pharma (Japan) | Takeda Pharmaceutical (Japan) | 300.0 | Schizophrenia drug license |
| Heptares Therapeutics (UnitedKingdom) | Shire Pharmaceuticals (United Kingom) | N/A | Parkinson's drug option agreement |
| Tekmira Pharmaceuticals (Canada) | Bristol-Myers Squibb | N/A | RNAi drug delivery collaboration |
| Foundation Medicine | Celgene | N/A | Cancer diagnostics collaboration |
| Roche (Switzerland) | Merck | N/A | Hepatitis C drugs agreement |
| Biotique Systems | DuPont | N/A | Crop traits alliance |
May 20, 2011
http://www.burrillreport.com/article-takeda_expands_global_reach_with_13_7_billion_nycomed_buy.html