Binding offers could soon come in for Takeda’s Latin American business, which could fetch the company $1 billion to help pay off debt. And Brazil's largest drugmaker is reportedly in the lead.
EMS Pharma is now the front-runner to make a formal proposal by the end of May, Reuters reported, citing three sources with knowledge of the process.
Blackstone-backed Brazilian investment shop Patria Investments could also come up with an offer, while other previously rumored potential bidders such as private equity firms and frequent pharma buyers Advent and CVC Capital Partners may not be interested in the unit after their analyses, the sources told the news service.
A fourth source told Reuters that EMS is very interested in the franchise. It’s not a total surprise, given that its sister company Novamed last year picked up Takeda’s Brazil-based, wholly owned unit Multilab for 500 million Brazilian real ($130 million). Both EMS and Novamed belong to Brazilian holding company NC Group under its pharmaceutical umbrella.
In the 2018 fiscal year that ended in March, Takeda recorded sales in Latin America of 88.1 billion Japanese yen ($800 million), up from 75.7 billion yen in the previous fiscal cycle. But make no mistake—the jump can largely be attributed to the addition of three months’ worth of Shire revenue, as Takeda wrapped the Shire megamerger in January. If looking only at the pre-Shire nine months, the business’ revenue dropped by 2.8% year over year.
Latin America constitutes about 4% of Takeda’s total revenue, and the unit sells prescription drugs in oncology and gastroenterology as well as vaccines and some over-the-counter products.
During Takeda’s full-year earnings call this month, CEO Christophe Weber restated that his company is looking to jettison $10 billion worth of assets to help bring down its debt level to 2.0x adjusted EBITDA in three to five years.
Toward that goal, it has agreed to sell its Xiidra eye drops to Novartis for up to $5.3 billion and its TachoSil surgical patch to Johnson & Johnson for about $400 million. Other selloffs will come from “hundreds of products” outside of its core areas of gastrointestinal, rare diseases, plasma therapies, oncology and neuroscience, Weber said.