Takeda make a strategic acquisition




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Video title: Takeda make a strategic acquisition
Released on: May 23, 2011. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, Fintan Walton talks to Nigel Borshell, Director at PharmaVentures. Nycomed’s geographic presence in Europe and Emerging markets a strong justification as Takeda show their desire to become a truly global player. Blockbuster Actos patent cliff for Takeda covered by Nycomed’s $4+B turnover. The potential for Roflimilast (Daxas/Daliresp) makes ‘Respiratory’ a exciting new therapy area for Takeda.
Takeda's acquisition of Nycomed
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here in Oxford. On this show I have Nigel Borshell, who is a Director within the Corporate Advisory Group at PharmaVentures, welcome to the show.
Nigel Borshell:
Thank you.
Fintan Walton:
Nigel, you are here to make some comment on the recently announced deal of Takeda acquiring Nycomed [PharmaDeals ID = 40811], Nycomed obviously is a European based private equity owned pharmaceutical company small company relatively, is this a good deal?
Nigel Borshell:
Well if you look to officially at the numbers you mightn't question that and that the multiple on the sales is about 3.2 which you know it's fairly rich when you look at Nycomed's profile, I mean over the next four or five-years they've got a pretty flat sales profile, they've got sales of about 4.2 billion. So superficially you think well that's quite a lot to pay for a business that doesn't seem to have a massive amount of growth within it's current pipeline, but a step back from that and if you look at it from a strategic perspective then I think it's got much more justification and looks like a good deal from for Takeda based on their recognition or their weaknesses and where Nycomed is strong.
Nycomed's growth in emerging markets
Fintan Walton:
One of the things that Nycomed has been successful in is and where it gets most of its growth is actually in the emerging markets, is that another reason?
Nigel Borshell:
I think so, yes Takeda is very focused on the Japanese market in terms of percent of their sales and Nycomed have spent a lot of effort in focusing on emerging markets, they bought the generic business in the CIS from Sanofi-aventis [PharmaDeals ID = 33719] a few years back and so that helped to develop their presence in Russia where they are very strong and they also have a good presence in Brazil and emerging markets are very important for all pharmaceutical companies looking for growth in this flat environment. So you know I think it gives Takeda a geographic presence that they didn't have that they need to have if they want to maintain themselves in the top-tier pharma companies.
Why didn't Takeda buy Nycomed's Dermotology business in US ?
Fintan Walton:
So one of the interesting features of this deal Nigel is that they have not Takeda are not buying the dermatology business in the US, do you know the reason for that?
Nigel Borshell:
Well I understand that there are some legal issues around that particular business and dermatology is not a particular interest to Takeda, I think they are more interested in may be building a respiratory franchise that they are not very strong less than 1% of Takeda's business is in respiratory , where as Nycomed have got this Daxas Roflumilast product addressing COPD which is just approved in the US and has big potential also in asthma and so I think Takeda see respiratory as being an interesting area, so from a pipeline perspective there is some good new market areas that are not threatening to Takeda's own business.
Why any European or US based Multinational did not buy Nycomed?
Fintan Walton:
I suppose one question that people would have is why didn't a European or a US based multinational buy Nycomed?
Nigel Borshell:
Well Nycomed have got debt, they're not cash rich there is about 5.5 billion debt there, so it's got to be a very serious purchase looking at the other benefits of the company and Takeda as I said earlier got this geographic strength in Japan which turns out to be a global weakness if you trying to look them as a global company and so the other companies are not quite as disproportionate in their geographic business as Takeda and so they've got the most strategic benefit from acquiring new geographic presence in both Europe and in these emerging markets, so will be very good for them from that perspective.
Fintan Walton:
Nigel, thank you very much indeed for coming the show.
Nigel Borshell:
Thank you.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Nigel Borshell
Director
Nigel Borshell has over 30 years experience in Life Sciences including senior international commercial management roles in diagnostics and biotechnology gained at drug testing specialists Syva Company, Hoechst's Behring division, US diagnostics giant Dade Behring, and as European Business Development Director for California-based Cepheid. Nigel Borshell is the author of numerous Pharmaceutical/Biotech Industry reports, papers and articles. At PharmaVentures, Nigel Borshell specializes in valuation methodologies, deal structure modeling, and pricing policies.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialisation.
PharmaVentures
PharmaVentures is a company that has proven success in deals and alliances. PharmaVentures offers: Over 18 years of healthcare industry experience Experience gained from working with in excess of 1000 clients in 38 countries, and conducting more than 450 assignments Over 40 specialist advisors, analysts and researchers Skills honed in many countries - 80% of its business comes from outside the UK