Hungry Like a Wolf, Takeda Sets Aside $15 Billion Cash for U.S. Acquisitions

Published: Sep 16, 2016

Hungry Like a Wolf, Takeda Sets Aside $15 Billion Cash for U.S. Acquisitions September 14, 2016
By Alex Keown, Breaking News Staff

OSAKA, Japan – Takeda is on the prowl and looking for big game. The company has set aside $15 billion to go after U.S. pharmaceutical acquisitions in an effort to reduce its dependency on the Japanese domestic market, which has been sluggish of late, Reuters reported.

Possible acquisitions would be in line with the company’s plan to refocus its research & development on three targeted therapeutic areas—oncology, gastroenterology and the central nervous system (CNS). Citing unnamed people familiar with the matter, the Financial Times said the war chest could be used for one big acquisition or several smaller ones. Christophe Weber, Takeda’s chief executive officer, said with the company’s new focus, he is more open to plunging into the M&A frenzy that has dominated the landscape for the past two years.

"We are much more organized and ready to do something now than one year ago," Weber said, according to Reuters. "We are very active and we are looking at opportunities."

Not only would a deal with a U.S. pharmaceutical company expand Takeda’s revenue streams, it would also entrench the company as a global pharma company. To do so, Weber told Reuters, requires investments outside of Japan. Part of the company’s refocus means Takeda will now concentrate research and development activities in the United States and Japan to “build a world-leading R&D organization and pipeline.” In a statement, Takeda said the refocusing effort is critical to provide the company with the “necessary organizational and financial flexibility to drive innovation, enhance partnerships, and improve R&D productivity for long-term, sustainable growth.”

Weber told Reuters the company is focusing on strengthening its pipeline, particularly as several of its key products, including blood cancer drug Velcade, GI drug Dexilant and irritable bowel syndrome drug Amitiza will lose patent protection over the next few years and face generic competition. Although the cancer drug and others in its GI and CNS units will face competition, they have been strong earners. Takeda’s quarterly report shows GI drugs caused revenues to triple compared to reports one year ago, driven primarily by sales of entyvio and takecab, for the treatment of acid-related diseases. CNS treatments, driven by trintellix, also saw a huge spike in revenue during the first quarter, according to company reports.

There was no indication what company Takeda may have in its sights. Earlier this year, there were rumors that Takeda had approached embattled Canadian pharma company Valeant Pharmaceuticals. However, Valeant had recently undergone a change in leadership and opted to give its new CEO time to adjust before entering into any M&A deals.

Credit Suisse analyst Fumiyoshi Sakai told the Financial Times that Takeda needs to act fast due to the frenzy of M&A activity, as it will face competition from other companies like Sanofi and Amgen . Sanofi in particular may be quite hungry after it lost out to Pfizer in the bid for Medivation earlier this month. California-based Gilead Sciences may also be looking to strike a deal to broaden its pipeline beyond the hepatitis market—a market its drugs Harvoni and Sovaldi dominate.

As for Takeda, the company has been shedding assets and deals that no longer fit with its new focus, freeing up money to pursue acquisitions, as well as enhance its vaccine pipeline with drugs battling Dengue and the Zika virus.

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