A who’s who of big pharma and biotech companies are out there shopping deals. And now, word has it, Japan’s Takeda is breaking with recent tradition to elbow into the fray.
The company has set aside up to $15 billion to do deals in the U.S., the Financial Times reports, based on conversations with investors. Takeda is eyeing companies with drugs that treat cancer, gastrointestinal problems, and neurological diseases.
The Japanese drugmaker will consider laying out the entire amount on one deal or split it among several smaller ones. One investor told the FT that Takeda would even be willing to do a $20 billion deal if the assets were worth that.
That’s precisely the strategy that several Big Pharma and Big Biotech companies have set out for themselves. Sanofi ($SNY), for instance, which has been on the hunt for deals since Olivier Brandicourt took over as CEO last year, has said it’s open to deals as large as its 2011 Genzyme buyout, i.e. more than $20 billion. Gilead Sciences ($GILD), Amgen ($AMGN), AstraZeneca ($AZN), Biogen ($BIIB) and several others are eyeing deals from bolt-on to big.
And that could push prices up. Consider the race for Medivation ($MDVN), which swept up not only Sanofi and the company’s eventual buyer, Pfizer ($PFE), but a short list of other major bidders, including Gilead. The offers started below $10 billion, and ratcheted upward in several rounds of bidding until Pfizer agreed to shell out $14 billion.
Takeda’s dealmaking news follows a spat of partnerships and restructurings at the Japanese drugmaker as CEO Christophe Weber makes his mark. The first non-Japanese chief executive at the company, Weber was brought in to make the sort of sweeping changes necessary to pull Takeda out of a rut. The company’s top seller, the diabetes drug Actos, went off patent in 2012 and generic competition quickly eroded sales.
Its financials have since recovered somewhat, thanks to cost cuts and other changes, but more competition is on the horizon: Its cancer med Velcade loses its IP shield next year, and other expirations are looming.
Only yesterday, the company said it had teamed up with a contract research organization, PRA ($PRAH), to outsource a big chunk of its R&D, and gain assistance with regulatory work and side-effects surveillance.
And that CRO deal is just part of a companywide R&D restructuring that will concentrate development work around two hubs, one in Japan and the other in Boston, and wind down its work in the U.K. A third lab will remain in San Diego.
Meanwhile, Takeda inked a Zika vaccine deal with the U.S. government that could eventually bring in more than $300 million, and it pushed its dengue vaccine into Phase III testing, aiming to enter that $1 billion market.
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