Word on the street proved true today; Takeda Pharmaceutical announced it had agreed to buy Nycomed for almost $14 billion. The deal gives the Japanese drugmaker a couple of things it sorely needed: A bigger geographical footprint and some additional cashflow to offset the loss of patent protection on its diabetes drug Actos.
Right now, Takeda is strongest in Asia and the U.S. Meanwhile, Nycomed's strengths lie in Europe and in emerging markets. In fact, two-fifths of Nycomed's revenues now come from those emerging markets. Gaining the Swiss company's infrastructure there--not to mention those sales--will give Takeda a boost in an area it had neglected.
And these days, drugmakers neglecting emerging markets do so at their peril. We were reminded why in yesterday's growth forecasts from IMS Health, which showed emerging markets growth far outpacing the rest of the world for the next five years. Whereas China and 16 other emerging markets are set to grow by 13 to 16 percent annually over that period, mature markets are expected to expand by four percent max.
Nycomed also comes with Daxas, a new respiratory drug that can help defray the loss of revenues to generic versions of Actos. Takeda's desire for that drug was something Nycomed CEO Hakan Bjorklund sought to emphasize, rather than the 30 billion yen ($365 million) in annual costs the Japanese drugmaker expects to wring from the merged companies. "This deal was not about synergies," he said (as quoted by Bloomberg).
Curiously, the sale doesn't include Nycomed's U.S. dermatology unit, which will remain in the hands of the Swiss drugmaker's private equity owners. That segment of the company has 700 employees and half a billion in annual sales.