Japanese Pharmaceutical To Buy U.S. Drug Maker In Massive Deal

Takeda, a Japanese pharmaceutical company, is set to buy out U.S. cancer drug maker, Ariad Pharmaceuticals in a multi-billion dollar deal.

Takeda announced in September that it was in the market for large acquisitions in an effort to reduce its dependence on domestic sales.

The Japanese company agreed to pay $24.00 for each Ariad share, whose stocks were up at $23.77 during trading on Monday.

The $5.2 billion dollar deal will aid Takeda in increasing its presence in the oncology drug market, just as one of the company’s own top-selling blood cancer drugs, Velcade, is expected to face tough competition this year.

Velcade and other key products are set to go off patent from 2020.  With the Ariad deal, the colossal Japanese drug company gains access to the leukemia drug, Iclusig.

While Iclusig is expected to generate sales of $170 million to $180 million in 2016, Ariad came under fire in October for price increases of the drug.

Ariad had previously suspended Iclusig sales in 2013 after data showed it was associated with serious complications. They resumed marketing the drug after the FDA sanctioned its use in a narrower patient population.

Cancer drugs are becoming extremely appealing to large drug makers, as the price of the necessary drugs continue to rise and big deals continue to go through.

For example, San Francisco-based, Medivation, was bought by Pfizer for $14 billion in August.

While Takeda has agreed to pay a premium of about 75 percent for Ariad, due to the lack of serious oncology assets, other Ariad bidders could emerge, SunTrust Robinson analysts said.

According to Reuters, the deals equity of $4.66 billion, is expected to add to Takeda’s earnings in 2018.

Takeda is funding the transaction by taking on $4 billion in new debt.

The Japanese drug company’s last massive deal was in 2011 when it paid almost $14 billion for the Swiss drug maker, Nycomed.

H/T: CNBC

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