Daiichi Sankyo Dumps $3.6 Billion Sun Pharma Stake

Daiichi Sankyo Dumps $3.6 Billion Sun Pharma Stake
April 20, 2015
By Alex Keown, BioSpace.com Breaking News Staff

TOKYO - Daiichi Sankyo Company is divesting itself of 8.9 percent stake in Sun Pharma, India's largest drugmaker, on the Indian stock exchange, the company announced Monday morning.

The company said it is selling the Sun Pharma shares, which were acquired following the completion of Sun Pharma’s merger with Ranbaxy Laboratories Limited last month, from the “perspective of corporate value.”

“Daiichi Sankyo has performed a review of the Sun Pharma shares and reached a conclusion to sell the shares entirely or partially. After the sale, Daiichi Sankyo will not be a major shareholder of Sun Pharma. However, the existing business partnership with Sun Pharma will remain unchanged,” the company said in the press release.

, which are traded on the Tokyo Stock Exchange, were slightly down this morning.

Reuters reported that at the time of the Ranbaxy sale to Sun Pharma, “the value of the Japanese firm's investments in the country had halved since it bought control, as the regulatory problems had triggered a sharp fall in Ranbaxy's share price.”

Sun Pharma, based in Mumbai, acquired Ranbaxy for $3.2 billion from Daiichi in 2014. As part of the deal Daiichi received its stake of 214,969,058 shares in Sun Pharma. Founded in 1983, Sun Pharma has a portfolio of more than 3,000 molecules to treat multiple ailment, including psychiatry, neurology, cardiology, orthopedic, diabetes-related illnesses, gastroenterology, ophthalmology, urology, dermatology, gynecology, respiratory, oncology, dental and nutritionals.

The Economic Times of India reported the sale will not totally compensate Daiichi for the $4.6 billion it spent when it acquired Ranbaxy. However, the sale will help the Japanese company boos earnings, the paper reported.

According to a March press release issued by Daiichi, the company holds about 63.4percent of Ranbaxy shares, which at the current rate equates to an estimated profit around 340 billion yen, or $2.85 billion.

“Daiichi Sankyo will make an announcement concerning the effect of any gain or loss on the sale of Sun Pharma shares when results of operations for the fiscal year ending in March 2015 are announced,” Daiichi Sankyo said in its statement this morning.

In March Daiichi Sankyo entered into approximately an $800 million agreement with AstraZeneca to market Movantik, which is prescribed for the treatment of opioid-induced constipation in adults with chronic non-cancer pain. OIC is caused by prescription opioid pain medicines. The drug was approved by the US Food and Drug Administration in September 2014 and a launch of the drug is planned for this month. Movantik will compete with OIC drug Amitiza, a combined effort from Sucampo Pharmaceuticals, Inc. and Takeda Pharmaceuticals U.S.A., Inc. Amitiza was approved by the FDA in 2013.

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