The merger between Mitsubishi Chemical Holding's pharmaceutical unit and Tanabe Seiyaku has been completed and the new entity is looking to expand its presence outside Japan and create a more efficient R&D and manufacturing machine.
The two firms decided in February to set up Mitsubishi Tanabe Pharma Corp (MTPC), which will be the fifth largest drugmaker in Japan, and the deal has been heralded as a significant step in a wave of consolidation that is expected to sweep through Japan's drugs industry. The all-stock deal, which is valued at 523 billion yen ($4.3bn), will create a new company that hopes to have sales in 2010 of around 480 billion yen and operating income of 100 billion yen.
When the merger was first announced, the two companies explained the rationale behind the deal as saying that "pharmaceutical companies that lag behind in terms of global competitiveness" face being driven out of the industry altogether.
Most of the new entity's R&D efforts will come from Tanabe, whose best-selling drug is Remicade (infliximab) for rheumatoid arthritis, licensed from Johnson & Johnson. Other big sellers include the spinocerebellar degeneration treatment Ceredist (taltirelin) and the blood pressure drugs Herbesser (diltiazem) and Tanatril (imidapril). Mitsubishi Pharma's top drug is Radicut (edaravone), a brain-protecting agent used to treat acute ischemic stroke.
Entry into generics
In confirming the completion of the deal, MTPC also noted that it intends to be "positive in taking up thechallenges presented by new business opportunities". In particular, it is looking at setting up a generics business, by using to the full "all of the company's reliability assurance, R&D, manufacturing and distribution foundations to realise a complete, high quality product line-up and stable supply". The company will focus on immunology and inflammatory diseases, as well as diabetes and lipid metabolism disorders, plus hepatic diseases.
The importance of expanding beyond Japan has become a pressing issue as the country's firms are under pressure to grow in order to stay competitive in the face of government-ordered price cuts and the increased presence of overseas companies.