Japanese drug maker Shionogi to acquire American rival for $1.1 billion

02 September 2008

Japanese pharmaceutical company Shionogi has announced plans to buy out US company Sciele Pharma for $1.1 billion, the fourth big overseas deal in nine months by Japanese drug makers eager to expand overseas.

The planned bid, which follows acquisitions by Takeda Pharmaceutical, Daiichi Sankyo and Eisai, is aimed at building Shionogi's sales network in the US. (See: Cabinet likely to clear Daiichi-Ranbaxy deal next month and Japan's Takeda to acquire Millennium Pharma for $8.8 billion)

"As we have moved ahead on improving our product pipeline, we have been faced with increasingly imminent challenge of getting hold of a sales network in the world's largest market," the Shionogi president, Isao Teshirogi, said. ''Sciele's sales force has a high productivity. It has what we have been looking for.''

Teshirogi added that Sciele should also help his company in getting approval for new drugs from US regulators.

For Sciele Pharma, which specialises in branded prescription products focused on cardiovascular, diabetes, women's health and pediatrics, the deal comes as it faces a possible plunge in revenue because of generic competition for its No.1 drug, the blood-pressure medication Sular.

Shionogi said it would offer $31 per Sciele Pharma share, a 61 per cent premium to Sciele's close of $19.27 on Friday, costing $1.1 billion. Shionogi's total bill comes to $1.42 billion, including $325 million to redeem senior convertible notes.