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news.Following increased media speculation, Japanese pharmaceuticals giants Daiichi Pharmaceutical and Sankyo have confirmed that they have concluded a basic merger agreement. The merger, which will begin in October 2005, will create Japan's second largest pharmaceuticals group and has been valued at more than $7 billion.
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Both companies share a common focus on priority R&D categories including cardiovascular, antibacterial, glucose metabolic, bone disorders, immune disorders and anti-allergy. Integration will enable increased concentration of R&D budgets and help facilitate the development of a greater number of compounds within each treatment category.
Improved depth and concentration within treatment categories will help to prioritize and select promising compounds, boosting both the effectiveness and speed of development.
Centering on the cardiovascular category, the combined companies will have a product portfolio with market leading shares in Japan in several therapeutic areas. In addition, a combined sales force, together with a well-established distribution network, will give the integrated company unmatched strength in domestic sales operations.
The integration will also present fresh opportunities for bringing new products to overseas markets and strengthen direct sales capabilities.
Daiichi & Sankyo have agreed a two-phase process for their integration. In the first phase, through stock transfer by Daiichi and Sankyo, a joint holding company will be established in the form of a fully-fledged parent company. Daiichi and Sankyo will both become wholly owned subsidiaries of this new entity.
In the second phase, the ethical pharmaceuticals businesses of both subsidiaries will be integrated by April 2007. The status of the over-the-counter (OTC) businesses and non-pharmaceutical businesses will be considered during phase two.
Kiyoshi Morita, president and CEO of Daiichi, commented, “The integration of our two businesses will enable us to achieve a level of growth and a range of opportunities that would be out of our reach individually.”
Takashi Shoda, president and CEO of Sankyo, said, “This partnership is a perfect fit. It gives us critical mass in R&D and sales operations both at home and internationally, ensuring our competitiveness in the global arena.”