Daiichi Sankyo to absorb manufacturing units in move to leverage ADC strength

Japan’s Daiichi Sankyo plans to conduct an absorption-style merger of two wholly owned manufacturing companies in a bid to leverage its dominance in the antibody-drug conjugate (ADC) space.

The mergers are expected to become effective April 1, 2025, Daiichi Sankyo said in a Tuesday release (PDF).

Under such mergers, an absorbed company transfers its assets to the absorbing company. Afterward, the absorbing company continues to exist while the absorbed company ceases to exist.

Daiichi is merging the firms in a bid to "further deepen the alignment between the manufacturing function and pharmaceutical technology development function" of its operations, the drugmaker said in the release. 

No new shares will be issued, and no cash will be allocated as a result of the merger. No changes will be made in Daiichi Sankyo’s company name nor in the location of its headquarters.

Analysts at GlobalData expect Daiichi Sankyo to dominate the burgeoning ADC space through 2029, with its sales in the market reaching $10 billion by that time. The forecast paints Daiichi as the runaway leader in the market, with Seagen and Roche following as distant second- and third-place players, respectively. GlobalData predicts that sales of Seagen and Roche's ADCs will reach $5.8 billion and $3.6 billion by 2029, respectively.

Pfizer is in the process of acquiring Seagen in a $43 billion buyout.

As for Daiichi, the company recently inked an ADC megadeal with Merck & Co. that could swell to a whopping $22 billion in value.