Daiichi Sankyo Cuts-and-Pastes for 5-Year Plan: Sister Companies Daiichi Sankyo, Inc. and Asubio Pharma Co., Ltd. Merge

April 1, 2015
By Mark Terry, BioSpace.com Breaking News Staff

Parsippany, N.J.-based Daiichi Sankyo, Inc., the U.S. branch of Japan-based Daiichi Sankyo Company, Ltd. announced today that it is merging with Asubio Pharma Co.. Asubio Pharmaceuticals is the U.S.-based subsidiary of Japanese company Asubio Pharma Co., Ltd. Asubio Pharmaceuticals is also an American-based unit of Daiichi Sankyo.

Asubio Pharma Co., the parent company that focuses on discovery research, will continue to operate as a wholly owned subsidiary of Daiichi Sankyo Co.

“In line with the Daiichi Sankyo five-year business plan to optimize our business of delivering innovative treatment to patients,” said Glenn Gormley, senior executive officer and global head of research and development for Daiichi Sankyo Company, Ltd. in a statement, “consolidating the current Asubio US projects under the company’s overall R&D organization helps us streamline our operations.”

This news closely follows a March 24 story of Daiichi Sankyo laying off 16 percent of its U.S. staff. The company’s North American revenue increased 6.0 percent from the previous year, but in local currency revenue fell 1.5 percent.

In addition, the company recently paid $39 million to the U.S. Department of Justice and other government agencies for violating the False Claims Act and wining and dining physicians and offering lucrative speaking deals to improperly encourage them to prescribe Axor, Benicar, Tribenzor and Welchol.

Two of the company’s patents are expiring this year and in 2016. Cholesterol medication Welchol expires in June. Blood pressure medication Benicar’s patent expires in 2016. Benicar accounts for 27 percent of Daiichi’s sales in the last fiscal year, accounting for $2.6 billion.

Daiichi Sankyo also announced on March 25 the completion of a merger between Sun Pharmaceutical Industries Ltd and India-based Ranbaxy Laboratories Limited. Ranbaxy was a subsidiary of Daiichi Sankyo. That deal was for about $4 billion.

In 2008 Daiichi Sankyo acquired Ranbaxy for about $4.7 billion and took a $3.7 billion writedown on the deal six months later. Ranbaxy ran into a number of problems with the U.S. Food and Drug Administration (FDA) regarding quality in their factories, resulting in at least four of the plants being shut out of the U.S. market.

Much of these mergers and acquisitions and restructuring are part of the company’s five-year business plan, which is expected to run from April 1, 2013 to March 31, 2018. There are several goals, including responding to the expiration of several product patents, focus on its core strengths and research and development pipeline and restructure the company in a more efficient way.