Takeda to Buy Amgen Japan Unit for Up to $902 Million
Takeda Pharmaceutical Co., Japans
largest drugmaker, agreed to buy the local unit of Amgen Inc.
for as much as $902 million, gaining about a dozen experimental
medicines for diseases including cancer and arthritis.
Osaka-based Takeda will pay $200 million in cash initially
and as much as $702 million in additional payments tied to the
development of the treatments, the companies said in a statement
today. Thousand Oaks, California-based Amgen will also receive
as much as $275 million extra for worldwide rights to its
experimental cancer medicine known as motesanib diphosphate.
The deals widen the pipeline of products Takeda is
developing to buffer a drop in sales once its best-selling Actos
diabetes pill loses patent protection in 2011. Amgen, the
biggest biotechnology company, is cutting costs to offset lower
revenue. A drug typically becomes available in Japan four years
after its U.S. release because of the need for additional tests.
“Japan is a very complex market with specific regulatory
requirements, which make it pretty expensive for a company not
established in Japan to be able to launch and commercialize such
a large group of products, said Dominique Monnet, Amgens vice
president of global marketing, in an interview in Tokyo today.
Amgen decided to form a partnership with Takeda rather than
sell rights to individual drugs with multiple companies, he said.
The announcement was made after markets in Japan closed.
Takeda fell 40 yen, or 0.6 percent, to 6,340 yen on the Tokyo
Stock Exchange. The shares have plunged 19 percent the past year.
Takeda will buy all the shares of Tokyo-based Amgen K.K.,
the companies said. Bids for the unit were invited by Amgen
during negotiations with Japanese drugmakers last year.
Sales Slowdown
Takeda President Yasuchika Hasegawa is betting acquisitions
in biotechnology, including U.K.-based Paradigm Therapeutics Ltd.
last March, will provide new avenues for growth. Takeda, which
had 635.8 billion yen ($5.9 billion) in cash and other current
assets at Dec. 31, said last week that sales increased 1.7
percent in the third quarter, the slowest pace in at least four
years, as demand for its prostate and stomach-ulcer drugs fell.
“They are showing they are aggressive in terms of going
for acquisitions and strengthening pipelines, said Bruno
Ferrant, an equities analyst at Japaninvest KK, in a telephone
interview today. Todays announcement “can be seen very
positively, he said.
Vectibix Rights
The transaction is slated to be completed in the first
quarter and covers Vectibix, approved in the U.S. in 2006 for
colorectal cancer, and as many as 12 Amgen drug candidates
including some in the first two of three stages of patient
studies usually needed for a medicines regulatory review.
“The development programs included in this collaboration
represent the growth engine for Amgen in the next decade, said
Kevin Sharer, Amgens chairman and chief executive officer, in
the statement. “Takedas confidence in these programs validates
their potential to become innovative therapies for patients in
Japan and worldwide.
Amgen retains certain co-marketing rights in Japan on all
the drugs being developed with Takeda, and will receive at least
10 percent royalties on sales in Japan, the companies said.
Excluding motesanib diphosphate, all the molecules are produced
using biotechnology. They include AMG108 for rheumatoid
arthritis and asthma treatment AMG317.
Takeda will pay Amgen $100 million initially and as much as
$175 million tied to development targets for motesanib
diphosphate, also known as AMG706. The Japanese drugmaker will
also pay 60 percent of ongoing clinical research costs outside
Japan and receive half the potential profits made on the
medicine in other markets.
Job Cuts
Amgens 2007 earnings forecast was cut at least three times
last year after studies showed anemia drugs Epogen and Aranesp
raised the risk of heart attack and death in high doses. Amgen
said in August it planned to cut as many as 2,600 jobs and slash
capital spending by $1 billion.
Sales of Aranesp, the companys biggest product with $3.61
billion in sales in 2007, fell 26 percent in the fourth quarter.
The company said 2008 group revenue would be $14.2 billion to
$14.6 billion, down from $14.8 billion in 2007. Earnings
forecasts made by Amgen on Jan. 24 will remain unchanged by the
transaction, it said today.
