After being bought by Bain for $3.3 billion, Tanabe has reached a deal to sell its manufacturing unit and 17 products.
Tanabe Pharma has struck a deal to sell its Japanese manufacturing plants to Towa Pharmaceutical, pivoting to an outsourced model in the aftermath of its acquisition by Bain Capital.
The company, which was previously called Mitsubishi Tanabe Pharma, has historically manufactured its medicines at in-house facilities. However, having been bought by Bain for $3.3 billion, Japan’s Tanabe is selling its manufacturing subsidiary—which includes Onoda and Yoshitomi plants—to compatriot Towa. Tanabe is also transferring 17 active ingredients to Towa, a generic manufacturer, as part of the deal.
Selling the facilities and relying on third parties for manufacturing will allow Tanabe to focus on R&D and business development. The sale is the best way for the manufacturing operation “to fully leverage the technical capabilities and expertise it has cultivated to date and achieve further growth,” Tanabe said in a July 3 press release.
Tanabe plans to work with Towa to ensure the stable supply of affected products until the companies complete the transfer. Towa has three plants in Japan, plus a facility in Spain. Across Japanese sites in Osaka, Okayama and Yamagata, Towa has the capacity to make 17.5 billion tablets, according to its website. The company has an injectable production plant in a “quake-absorbing structure” at the Yamagata plant.
Towa plans to expand production capacity at the acquired facilities after the completion of the deal, which is scheduled for the end of November. The planned investment is part of a push to increase total capacity to 24 billion tablets by 2031 and to more than 30 billion tablets by 2037.
The deal, of which the financial terms are private, will complete Tanabe’s staggered exit from in-house drug production. In 2013, the company outlined plans to consolidate its manufacturing network. Tanabe sold its Ashikaga plant to CMIC in 2013 and began transferring its Kashima site to Sawai Pharmaceutical in 2014. The restructuring also affected a facility in Osaka.
Tanabe exited the restructuring with two Japanese production sites, namely the Onoda and Yoshitomi facilities. The company built a manufacturing facility for solid dosage formulations at the Yoshitomi site in 2016. Tanabe subsidiaries operate manufacturing facilities in South Korea, Taiwan and Indonesia.
Once the deal closes, Towa will assume responsibility for Tanabe drugs including Urso, Depas and brotizolam. The Onoda and Yoshitomi plants will receive contracts to continue to make the medicines they currently produce.
