Takeda unlikely to sell OTC unit to pay Shire merger debts

Last week Takeda announced three new research collaborations in immuno-oncology, and Weber gave more details about the company’s strategy after the deal closes.

According to Reuters, one thing Takeda will not be doing is selling its over-the-counter (OTC) business as a quick fix way of paying back some of the $32 billion bank loans it took out to finance the merger.

Reuters said that Takeda plans to sell up to $10 billion worth of unwanted assets – but Weber reportedly told a news conference that selling off the OTC unit will not be the company’s first priority.

Without elaborating further, he said: "We have some businesses outside of Japan where we are not really performing."

Takeda’s shares rose nearly 10% in morning trading after the company announced it would issue around 770 million shares worth 5.85 trillion yen ($54.11 billion), outperforming the benchmark index, which was up around 2.7%.

The Japan Times reported that Weber said that the merged company’s annual consolidated sales are forecast to nearly double to $31.3 billion.

And Bloomberg reported that Weber believes that pharma mega-mergers have come back into vogue after years where smaller "bolt-on" acquisitions became the norm.

He cited Bristol-Myers Squibb’s $74 billion acquisition of Celgene as evidence that large mergers were becoming necessary to fund the risky R&D process to develop new drugs.

A key reason behind the Shire acquisition is to boost Takeda’s cash flow, in order to support its R&D efforts.

These R&D efforts will be vital as revenues from a new generation of medicines will be essential to pay off the huge debt needed to finance the merger.

"If you look at the top 10 pharmaceutical companies today, not a single one didn’t come from an M&A," he said.

"M&A is always a key part of the industry. Why? Because we are in an industry which invests enormously in R&D, at risk."

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