Even as US and European pharmas downsize their stateside sales forces, Japanese pharmas have become a significant driver of M&A activity in America, seeking to expand their business in a market that's still far and away the world's largest. But are they showing up to the party just as the punchbowl has been exhausted?
Among the acquisitions:
- Osaka-based Dainippon Sumitomo Pharma (DSP) scooped up Sepracor in 2009, paying a princely $2.6 billion for the Marlborough, MA drugmaker's Lunesta, Xoponex and sales force of 1,300. DSP is looking to the US to grow sales of its schizophrenia drug Lurasidone, and was willing to gamble 60% of its market cap on getting that foot in the door, as one analyst noted to the Wall Street Journal at the time. Heading Sepracor is Sam Hamanaka, who launched Takeda's US operations in 1998.
- Takeda, also based in Osaka, acquired Cambridge oncology specialist Millennium for nearly $9 billion in 2008, rebranding it “Millennium: The Takeda Oncology Company” and making president and CEO Deborah Dunsire a direct report of Takeda president Yasu Hasegawa. That same year, Takeda and Abbott dissolved their 31-year joint venture, TAP Pharmaceutical Products. With generic competition for Actos looming, the company announced plans for 1,400 US layoffs in May.
- Astellas Pharma, headquartered in Tokyo, formed from the 2005 merger of Yamanouchi and Fujisawa, acquired Melville, NY oncology specialist OSI in May for $4 billion. OSI developed Tarceva with Roche.
- Eisai bought MGI Pharma for $3.3 billion in 2007.
- In 2008, Nagoya-based Kowa Co. bought ProEthic, a cardiovascular specialist with a sales force of 250, as a platform for marketing Livalo in the US. Livalo is the third-largest cholesterol drug in Japan, with a 13% share of the market. Kowa Pharmaceuticals America is comarketing the drug, which launched last month, with Lilly in the US.
And that's to say nothing of the in-licensing frenzy. Only last month, Eisai made a big bet on our national waistline, signing a multi-million dollar deal with Arena Pharmaceuticals for the right to sell Arena's lorcaserin weight-loss pill, if approved. The deal includes a $50-million upfront, another $160 million based on development and approval milestones and a $1.16 billion, one-time payment that may follow based on annual sales.
Eisai built up its US presence by licensing its products to US companies and, in doing so, building a substantial sales force until it could market its own products.
Daiichi Sankyo is co-marketing its Effient blood thinner with Lilly while shopping for drugs and partners in Europe, having bought German biotech U3 and a substantial stake in generics-maker Ranbaxy in 2008.
Japanese pharmas are hardly a monolith—they're as different from one another as their American and European counterparts. “They know they need strong, confident and engaged US leadership,” says an agency exec who works with several Japanese clients. “They've figured out they can't just develop products in Japan, license them and maximize share opportunity. And because it's incredibly difficult to buy one of these companies, they have the ability to be independent and compete in the marketplace.”