Daiichi Sankyo to sell Sun Pharma stake
pharmafile | April 21, 2015 | News story | Manufacturing and Production, Sales and Marketing | Daiichi Sankyo, FDA, India, Ranbaxy, Sun Pharma, generics
Daiichi Sankyo is to sell off all or part of its stake in Sun Pharma and back away from the troubled Indian pharma industry according to reports.
This move comes just weeks after Daiichi became the second largest shareholder in the generics firm following Sun’s purchase of fellow Indian company Ranbaxy, which was owned by Daiichi.
At the time the two companies said that they would “work together to leverage this relationship for global business growth”, but now Daiichi’s board has reportedly approved the sale of shares that could be worth up to $3.6 billion. Sun’s shares have risen on suggestions that it could buy the stake.
“From the perspective of the improvement of corporate value, Daiichi Sankyo has performed a review of the Sun Pharma shares and reached a conclusion to sell them entirely or partially,” the firm told Reuters.
The Japanese company purchased a controlling interest in Ranbaxy in 2008 for $4.6 billion, but the Indian firm may have been more trouble than it was worth – over the past few years it has been dogged by manufacturing and regulatory woes, including product sanctions from the FDA, that led to unexpected losses for Daiichi. Sun itself has also had similar problems.
Daiichi is facing its own troubles too, though. It will soon lose patent exclusivity on some of its biggest drugs – including blood pressure medicine Benicar (olmesartan) and cholesterol drug Welchol (colesevelam) – and is laying off 16% of its commercial staff in the US.
Following its purchase of Ranbaxy, Sun is the biggest pharma company in India and the fifth-largest generics firm in the world. Last week it announced that it would be teaming up with the Israel Institute of Technology Technion to develop new oncology drugs.
Daiichi will reportedly disclose the financial details of the Sun Pharma stake sale when it announces its Q1 financial results.
George Underwood
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