TAKEDA Pharmaceutical Co, Japan's largest drug maker, has agreed to buy Millennium Pharmaceuticals Inc for US$8.8 billion, gaining the blood-cancer medicine Velcade before the patent on its best-selling Actos diabetes pill expires.
Stockholders of the Massachusetts-based Millennium will receive US$25 a share in cash, 53 percent more than Wednesday's closing price, the two companies said. It is Japan's largest drug acquisition.
The transaction makes this the busiest week for mergers and acquisitions in the global health industry since March 2006 when Bayer AG bought Berlin-based Schering AG in a deal valued at US$18.4 billion, according to data compiled by Bloomberg News. Eisai Co agreed in December to buy MGI Pharma Inc for US$3.9 billion as Japanese companies look abroad because of government-ordered price cuts and a lack of products in development.
"This deal will boost Takeda's drug-development flow," said Mitsuo Ohmi, a Tokyo-based analyst at Japan Advisory LLC. "Millennium is a leader in genome medicine, with some promising drugs in early development."
The US company generated US$265 million in sales last year from Velcade, which is sold in more than 85 countries. Overall revenue climbed eight percent to US$528 million. Millennium, led by Chief Executive Officer Deborah Dunsire, earned US$14.9 million in net income, its first profit since 1998, according to data compiled by Bloomberg.
The drug's sales totaled US$83.5 million for Millennium in the first quarter, a 42-percent increase from a year earlier, the company said yesterday.
Takeda is acquiring Millennium to strengthen its cancer therapeutic business, "where we had a slow start in sales and in getting sufficient compounds into the pipeline," Takeda President Yasuchika Hasegawa told reporters in Tokyo yesterday. He said Takeda will provide details on the deal's impact on earnings when the drug maker reports results on May 9.
Takeda fell 2.5 percent to 5,410 yen on the Tokyo Stock Exchange before the announcement. Millennium gained 41 percent in the past year.
The takeover premium is more than double the 23 percent Tokyo-based Eisai paid to acquire MGI Pharma. Earlier this week, Switzerland's Novartis AG agreed to buy 77 percent of eye-care company Alcon Inc in a two-step transaction totaling US$39 billion. The acquisition was the biggest in health care this year.
UBS AG advised Takeda on the acquisition, while Edwards Angell Palmer & Dodge LLP provided legal services. Goldman Sachs Group Inc and WilmerHale acted as advisers for Millennium.
Takeda had 1.77 trillion yen cash at December 31, according to financial statements.