NEWS OF THE WEEK
DAINIPPON TAKES OVER SEPRACOR ACQUISITION: The purchase gives
Japanese firm key U.S. presence
Dainippon Sumitomo’s headquarters in Japan.
NEWSCOM
J
APAN’S DAINIPPON Sumitomo Pharma has
agreed to pay $2.6 billion in cash for Marlborough, Mass.-based Sepracor. The deal adds to a recent spate of overseas acquisitions by Japanese drug firms, which are struggling to expand their global presence in the face of a shrinking domestic market. Dainippon says the purchase of Sepracor will increase its overseas business to be roughly 40% of its overall sales and instantly establish a drug portfolio in the U.S., where Sepracor now sells six central nervous system (CNS) and respiratory products. More important, Sepracor gives Dainippon a foothold in the U.S. as it prepares to launch a Phase III trial for its schizophrenia drug lurasidone, notes BMO Capital Markets stock analyst Robert Hazlett. “Dainippon will be able to utilize Sepracor’s retooled 1,200-person sales force, which has contributed to the improved profitability of Sepracor’s core respira-
DANAHER INVESTS IN MASS SPEC INSTRUMENTATION: $1.1 billion
deal brings AB Sciex and more
D
AB SCIEX
AB Sciex launched this mass spectrometer last year.
ANAHER CORP., a maker of industrial and med-
ical tools with nearly $13 billion in annual sales, has signed two deals valued together at $1.1 billion that will give it ownership of mass spectrometry maker AB Sciex and a leading bioanalytical measurements business. In the first deal, Danaher agreed to pay $650 million for MDS’s analytical technologies division, which makes bioanalytical systems and owns half of the mass spectrometer joint venture AB Sciex. In a second deal, Danaher will pay $450 million to Life Technologies for its 50% share of AB Sciex. Danaher says the two deals will boost annual sales of its medical techWWW.CEN-ONLINE.ORG
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tory and CNS franchises,” Hazlett points out. In recent years, Japanese companies have been aggressively looking beyond their country’s borders for growth. Takeda Pharmaceuticals paid a whopping $8.8 billion for Cambridge, Mass.-based Millennium Pharmaceuticals; Daiichi Sankyo bought Indian generic drug firm Ranbaxy Pharmaceuticals; Eisai bought MGI Pharma; and Astellas Pharma bought Agensys. Sepracor, which had sales of $1.3 billion last year, also brings a solid pipeline of drug candidates. Eslicarbazepine, which FDA is currently considering for approval, is expected to be a strong contender in the epilepsy drug market. The company has four other drugs in late-stage clinical trials. In its early days, Sepracor made its mark by tweaking the ingredients of popular drugs to enhance their safety or efficacy. Historically, most active pharmaceutical ingredients were racemic, a mixture of left- and righthanded chiral molecules; Sepracor, however, found that one enantiomer often accounted for most of the health benefits, and the other was responsible for side effects. Sepracor patented a number of these enantiomers and then licensed them to larger companies for development. For example, it licensed a single-enantiomer version of the allergy drug Claritin to Schering-Plough. That single-enantiomer product, Clarinex, brought $790 million in sales for Schering-Plough last year.—LISA JARVIS
nologies segment by more than $650 million to $2 billion. The acquisition will make Danaher, the manufacturer of products such as Sears’ Craftsman hand tools, a force to contend with in the market for mass spectrometers used in drug discovery. The agreement with MDS will also give Danaher an option to purchase a half interest in a joint venture (with instrument maker PerkinElmer) that sells mass spectrometers for use in clinical diagnostics and environmental testing. And the MDS analytical acquisition will give Danaher positions in high-throughput and microplate detection systems, consumables, and instrumentation software. Stock analyst Efraim Levy, who is with the investment advisory firm Standard & Poor’s, says Danaher has an excellent track record of integrating companies into its existing operations and improving profit margins. He also suggests that the purchases could be part of a strategic foray into the analytical instrument segment. “They could make complementary acquisitions in the future,” Levy says. Danaher is a company that “likes to acquire businesses in a growth mode,” he adds. Danaher’s current medical technologies businesses include precision optics for microscopes and in vitro diagnostic equipment for hospitals, blood gas analyzers, and dental office instruments. The purchase is the second substantial instrumentation deal announced this summer. In July, Agilent Technologies agreed to buy bioanalytical instrument maker Varian in a transaction worth $1.5 billion (C&EN, Aug. 3, page 7).—MARC REISCH
SEPTEMBER 7, 2009
