Korean biosimilar firm Celltrion’s USD 266 million acquisition of Japanese outfit Takeda assets in the Asia-Pacific region marks a significant moment in Celltrion’s international expansion as well as yet another big-money deal for Takeda.


Since Takeda’s earthshattering announcement of its intended USD 62 billion acquisition of Shire – the largest pharma deal of 2018 – aftershocks have reverberated around the globe. The closing of the deal in January 2020 expanded Takeda’s geographic footprint significantly and allowed the Japanese firm to muscle its way into global top ten pharma rankings with post-merger revenues of around USD 30 billion. However, the work is only halfway completed. Takeda has set an ambitious divestiture goal of USD 10 billion in order to reduce the debt load incurred by the acquisition, with the ultimate goal of returning to a net debt to EBITDA ratio of 2.0x or lower before March 2024.


The new global strategy for Takeda is centred on four core therapeutic areas: Oncology, Gastroenterology (GI), Neuroscience, and Rare Diseases, with some allowances for targeted R&D investments into other areas like Plasma-Derived Therapies (PDT) and Vaccines.


As a result, Takeda has kept the lawyers and analysts busy. In July 2019, the company sold rights to ophthalmic drug Xiidra® to Novartis for USD 5.3 billion. In March 2020, non-core assets across the Russia-CIS region were spun off to STADA for USD 660 million USD, and to Swiss player Acino in the Near East, Middle East and Africa regions for USD 200 million. In March 2020, a similar sale of non-core products in Latin America was made to Hypera Pharma in Brazil for USD 825 million and in Europe to the Danish Orifarm Group, including two manufacturing sites in Denmark and Poland, for USD 670 million. With a couple of billions more to go, however, Takeda’s deal-making machine gears have kept turning, and a couple of weeks ago, another was announced, this time closer to home.


On 11 June 2020, Takeda announced yet another deal, this time with major Korean biosimilar player Celltrion, for assets exclusive to the Asia-Pacific region. In the accompanying press release, Takeda Growth & Emerging Markets Business Unit President Ricardo Marek explained, “across our Growth & Emerging Markets, Takeda must focus on accelerating the commercial availability of our highly innovative medicines for patients living with complex and rare conditions, and expanding our approach to Access to Medicines across the Region. While we remain committed to Asia Pacific, and the Emerging Markets, divesting non-core products helps achieve those goals.”


The 18 assets in question include both OTC products like Whituben® (a cold medicine) and Albothyl® (stomatitis), as well as the main growth drivers, the prescription drugs Nesina® (for diabetes) and Edarbi® (for hypertension), which are patent-protected until 2026 and 2027 respectively. In 2018, the total net sales of these assets were approximately USD 140 million. Celltrion would acquire all relevant business rights – including patents, trademarks and sales rights – to these products in nine markets, including South Korea, Thailand, Malaysia, Singapore and Australia. Takeda will receive USD 266 million upfront in cash and up to an additional USD 12 million in potential milestone payments, subject to customary legal and regulatory closing conditions. Alongside this, both companies entered into a manufacturing and supply agreement under which Takeda will continue to manufacture the divested products and supply them to Celltrion.


In a press statement, Celltrion vice-chairman Kee Woo-sung indicated, “our acquisition of Takeda’s Asia-Pacific product categories will contribute to promoting public health and ensuring the financial stability of national health insurance by localizing treatments for diabetes and hypertension products, which have heavily relied on foreign pharmaceutical firms.” Celltrion is currently developing its own insulin biosimilar but this deal accelerates Celltrion’s transition into a biopharma company with its own innovative portfolio of novel drugs.


Beyond the Korean market, the deal also comes at the perfect moment for their global expansion strategy. Kee also added that the acquisition would serve as a bridgehead for Celltrion’s growth to become a global biopharmaceutical firm. This would be Celltrion’s first major acquisition of foreign assets and represents the next stage of the Korean biopharma player’s development on the global arena. Established in 2002, the Korean company made global headlines when it became the first to develop an antibody biosimilar, Remsima® for Janssen’s infliximab. Remsima® was first approved by Korean regulators in 2012 and subsequently approved by the EMA in August 2013. Since then, it has brought in a cumulative total of USD 2.2 billion in revenues, as of March 2019.


With reports that Takeda is looking to sell its Japanese OTC unit – valued at around USD 3.7 billion – it seems the company is still on the prowl for more deals. Who could be the next lucky partner?