Takeda eyeing vaccinemakers as entry point to India
SINGAPORE--Takeda Pharmaceutical has identified a handful of Indian vaccinemakers as targets for M&A or other deal structures as it gets ready to take a plunge into a market that saw rival Daiichi Sankyo find nothing but trouble, according to sources that have spoken to executives at the Japanese company.
Takeda has eyed Bharat Biotech, an injectables, vaccines and contract firm, and vaccine and diagnostic firms like Indian Immunologicals, Biological Evans, widely known as Biological E--all based in the southern Indian city of Hyderabad. It has also had informal talks with the Serum Institute of India, the world's fifth largest vaccinemaker by volume.
"We have now established a presence there to understand the market better. It's a difficult market, very competitive and relatively low-margin, but we cannot ignore India," incoming CEO Christophe Weber told Reuters in an interview this week.
Weber said that size was not the issue now, according to Reuters, which quoted him remarking that "perhaps a deal would be small or perhaps big."
Daiichi Sankyo famously paid $4.6 billion for a 64% holding in Ranbaxy in 2008 and quickly ran into a storm of manufacturing troubles with quality, including allegations that executives smuggled in samples from other manufacturers to use in testing. Last year, the Japanese pharma set the stage to exit with a $4 billion all-share deal with India's Sun Pharmaceuticals, marking a point where almost all Japanese drug firms were thought to consider the country out-of-bounds for future M&A.
After buying Shantha Biotechnics in 2009, the French drugmaker watched the biotech run into quality-control issues. In 2010, UNICEF and WHO recalled and destroyed about 24 million doses of its pentavalent, Shan5, based on reports of white sediment in vials. The move impacted vaccination programs in 7 countries, and when the vaccinemaker couldn't meet the organizations' deadline for identifying the source of the issues and putting together a corrective plan, they disqualified it as a supplier--a status it didn't win back until May of last year.
Takeda executives, however, tell sources that have taken their time and done the homework--and that India is the place to be.
"They see it as a low-cost manufacturing base with quality," the first source said. "The timeline for any deal is not rush-rush--but sooner rather than later."
Takeda, Bharat Biotech, Indian Immunologicals and the Serum Institute of India had not responded to email queries by press time.
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