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Takeda Pharmaceutical (TYO:4502) is eyeing a solid European footprint and considering a variety of strategies to expand in the region, a company spokesperson based in Japan told this news service. However, industry participants have noted the difficulties Takeda faces in finding suitable targets.
The firm’s European arm, Takeda Europe, is assessing whether to buy just products, or entire companies for their products or infrastructure, or both. It is also considering the option of developing its own infrastructure, said the spokesperson.
He confirmed that Takeda is not considering another large size acquisition in Europe like its USD 8.8bn purchase of Millennium Pharmaceuticals in 2008. ”If we consider an option of M&A, it should be smaller,” the spokesperson said.
Several Tokyo-based industry analysts and bankers agreed that Takeda has been having problems making acquisitions in Europe and has “hit a wall” after trying unsuccessfully in the past to acquire “reasonable-sized” companies in Europe. Takeda does not want to pay premiums on any deals so many past discussions have broken up, two analysts noted.
Those interviewed concurred that Takeda has effectively “given up” on buying “reasonable-sized” companies in Europe. However, they do still expect Takeda to pursue more M&A deals in Europe, to gain infrastructure or a product, as its presence in Europe is “weak” and Takeda “needs both.” The recent IDM Pharma purchase “is not enough,” said one analyst and several others agreed that it only gave Takeda a “small” oncology product in Europe.
The firm’s revised strategy is now to pile up small to mid size deals in Eastern and Western Europe in a more piecemeal approach, those interviewed in Tokyo concurred. One analyst anticipated deals less than EUR 1bn in size and noted that if Takeda can see any direct synergies with the drugs in a company it acquires, that is a bonus, but it will still chase available deals that will provide sales and marketing infrastructure in Europe, and add the desired products later.
Several Tokyo-based industry participants could not envisage an obvious M&A target for Takeda in Europe. They stated that Takeda had already been in talks with Solvay Pharma, Lundbeck and Nycomed in Europe, but that these had not been fruitful.
Echoing other observers, one European sector banker said Takeda will struggle to find targets as it wants infrastructure in Europe but there aren’t too many European companies with wide infrastructure outside of the very big players like Sanofi-Aventis or GlaxoSmithKline, which would be too big for Takeda to buy.
“There isn’t an obvious, one-stop shop with pan-European infrastructure such as Solvay,” said the banker. “This is why Takeda was interested, and may still be interested in Solvay. I wouldn’t completely discard them from the auction yet.” A Takeda spokesperson, however, recently reiterated with this news service that the company is not interested in buying Solvay.
If Takeda does pass on Solvay, then UCB, Ratiopharm or Actavis could become targets or Takeda may rejig its acquisition strategy to focus on the US, the same European banker said.
UCB has a similar size and business to Solvay, as well as a wide marketing network although this company has heavy family ownership, the banker said. “Takeda could have a hard time acquiring UCB but they may still pursue it.” A second European banker dubbed a UCB purchase as “unlikely” due to this factor.
Ratiopharm and Actavis are both currently for sale and have meaningful European infrastructure so Takeda may also consider them, the first European banker noted. “They may not sell the product Takeda wants, but it could acquire other products and fit them into its network.” The second European banker expected Takeda to look at specialty pharmas first, rather than generics makers.
The first European banker doubted Takeda would swoop on Archimedes or Neurosearch; although they are active in oncology and CNS, they are small biotechs with little infrastructure. The second European banker agreed, adding that there is a big universe of other European companies out there.
One European analyst pointed to Shire as another potentially interesting target for Takeda, due to its CNS portfolio. ”The company’s shares are down sharply so this could be a good buy for Takeda,” the analyst said. However, this news service recently reported that while Shire is a rumored takeover target, it is unlikely to draw bids from large pharma players in the medium term, according to sources familiar with the company.
A second European analyst said that Scandinavian biotechs such as Genmab and Bavarian Nordic, which has been a rumored sale candidate, could be interesting for product acquisitions but conceded that such companies won’t have the infrastructure scale that Takeda is seeking.
One Europe-based executive at a rival Japanese firm noted that Takeda needs a large product in Europe to gain a meaningful presence in the region. In this vein, two industry participants in Tokyo said Takeda would also like to gain back the European marketing rights to the blockbusters Velcade from Johnson & Johnson and Lupron from Abbott, but doubted its chances of doing so.
The Takeda spokesperson did not comment on this, but agreed that one product can be a key European growth driver if it has good penetration. The spokesperson confirmed that the IDM acquisition was for the purpose of gaining the oncology product, as it has no sales infrastructure to be gained, but said it will help drive Takeda’s initiatives in Europe.
“Oncology is a very important area for Takeda,” he noted, but said the firm is not only focusing on acquiring products in oncology, but also for diabetes, as well as urology, CNS, and gastrointestinal disorders - anything within its core areas.
When questioned about its need to gain infrastructure, the spokesperson said Takeda has infrastructure in France, Germany, Spain, Italy, UK, Ireland, Austria, Switzerland and Portugal, although one Tokyo-based analyst noted that France and Germany were the only countries where the sales network was of a “decent” scope.
The Takeda spokesperson noted that Takeda has no sales channels in the Benelux or Nordic regions and confirmed is looking to gain footholds in these areas, in addition to countries in Eastern Europe, Russia and Turkey.
“Takeda Europe is organising firm plans under ongoing faesibility studies,” he said, stressing that M&A is one of many options for expanding its presence.
Meanwhile, one Tokyo-based analyst said that Takeda will still also need to acquire drugs in the diabetes space in the US due to the long approval delay of alogliptin, which had been expected to be approved late last year. “Otherwise Takeda will have to restructure that franchise and cut its diabetes reps in the first half of 2010 and hire again later when its product is finally approved,” the analyst said.
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