Daiichi must have thought that they can't settle the problems of this company and its better to go out now, he says. Watch the interview What are your thoughts on the Sun Pharma's acquisition of Ranbaxy?
When Japan's Daiichi Sankyo bought Ranbaxy, an Indian generics company, in it was expecting to benefit from a sharp rise in Indian drug spending, as well as global demand for generics. Yet safety concerns, production problems and fraud mean that Ranbaxy has brought little but trouble.
Daiichi Sankyo's decision to sell the company to India's Sun Pharma in April has therefore brought relief for investors, but also questions about the Japanese company's future strategy. All the more so because on May 15th, the company announced that its chairman, Takashi Shoda, is stepping down.
Mr Shoda was chief executive of Daiichi when the company made its ill-fated decision to buy Ranbaxy. Revenues were boosted by strong sales of some patented drugs and depreciation of the yen against the US dollar and euro. In global terms, it hovers on the edge of the top 20 biggest pharma companies.
Even so, Daiichi is heavily dependent on the Japanese market. Daiichi won marketing approval for the drug in Japan in Marchwhich should expand sales in years to come. Revenues have been hit by the quality problems at Ranbaxy's plants, four of which are currently banned from shipping to the US with two of these bans occurring within the last year.
Incapable of changing the corporate culture at Ranbaxy, Daiichi is now passing the baton to another leading player in the Indian generics sector, Sun Pharma.
Yet the all-stock deal announced in April values Ranbaxy at considerably less than Daiichi paid for it back in The deal still requires regulatory approval and is currently the subject of a court order in the state of Andhra Pradesh regarding insider trading allegations.
Daiichi Sankyo will therefore maintain its interest in the Indian market, as well as the global generics trade, and aims to recoup its losses via Sun. In the meantime, however, it will be able to concentrate on its core business of research-based pharma.
Priority areas for Daiichi Sankyo include research into oncology and anticoagulants. This year it will push ahead with commercialising a new anticoagulant, edoxaban, for which it filed for marketing approval in Japan in December and in the US and Europe in January In trials edoxaban performed well against the much older drug warfarin in preventing stroke and blood clots.
Other late-stage research includes a phase III study using prasugrel on patients with ischemic cerebrovascular disease. The company is also researching alternative uses of denosumab, the world's first human monoclonal antibody to target RANK ligand, a protein involved in bone breakdown.
Licensed from Amgen, the drug is already approved in Japan for bone complications from multiple myeloma and bone metastases from solid tumours, as well osteoperosis. Its use is now being investigated in patients with early-stage breast cancer, rheumatoid arthritis and giant cell tumour of the bone.
What to watch for The loss of Ranbaxy will have a mixed effect on the company's revenues in the short term. The longer-term question, however, is whether the Japanese company will venture into mergers and acquisitions again, and if so whether it will follow its compatriots in buying US biotech companies.
Daicchi Sankyo will need more good news like that before it forgets the headlines generated by its Ranbaxy purchase.The generic drugs market is estimated at $bn in and is expected to grow at a CAGR of % from to The generic drugs market is expected to grow at a CAGR of % in the second half of the forecast period.
Ranbaxy Laboratories has also announced 4 M&A deals since , with the lead deals being the acquisition of a majority stake of Ranbaxy by Japanese pharma giant Daiichi Sankyo. Report: Partnering Agreements with Ranbaxy This case presents a trading situation arising out of the acquisition of Ranbaxy Laboratories Limited, an Indian pharmaceutical firm, by Daiichi Sankyo, Inc., a Japanese pharmaceutical firm, in Ranbaxy daiichi - Free download as Powerpoint Presentation .ppt), PDF File .pdf), Text File .txt) or view presentation slides online. O Scribd é o maior site social de leitura e publicação do mundo.
How this report will benefit you. This case presents a trading situation arising out of the acquisition of Ranbaxy Laboratories Limited, an Indian pharmaceutical firm, by Daiichi Sankyo, Inc., a Japanese pharmaceutical firm, in Sun Pharma completed the acquisition of Ranbaxy Laboratories Limited, an integrated, research based, international pharmaceutical company, on 25 th March Information and announcements about this can be found on this page.
(See: Daiichi Sankyo completes Ranbaxy acquisition) Daiichi Sankyo, which plans to sell a little over $3 billion in bonds, has hired Nomura Holdings and Daiwa Securities to manage the sale.
Daiichi has accused the brothers of misrepresenting the problems facing Ranbaxy when it acquired the firm.
In , Daiichi had bought the Singh brothers’ % stake for $ billion. Sun’s acquisition of Ranbaxy Laboratories Ltd. (“Ranbaxy”) from Daiichi Sankyo Co., Ltd.
(“Daiichi Sankyo”). Under the terms of the proposed Consent Agreement, the parties are.