Spurred by a stagnating home drug market, Japan's Dainippon Sumitomo has struck a deal to buy Sepracor for $2.6 billion. Backed by bridge loans, Dainippon says it will pay $23 a share for Sepracor, a 27 percent premium on Tuesday's close.
For Dainippon the buyout nets the insomnia drug Lunesta, Xopenex for asthma and an epilepsy drug in clinical trials. It also gains a sales force of 1,200 schooled in marketing CNS drugs as it lays the groundwork for its planned launch of the experimental schizophrenia drug lurasidone. A marketing application for lurasidone is expected next year now that the therapy has posted positive late-stage data.
"Dainippon must be extremely confident in lurasidone, although I have some doubts," Credit Suisse analyst Fumiyoshi Sakai told Reuters. Japan's drugmakers have been invading other markets in the face of rigid government control of drug prices and the scheduled loss of patent protection for key blockbusters. Those same dynamics drove Takeda's $8.8 billion deal for Millennium and Eisai's $4 billion acquisition of MGI Pharma. And even in the face of possible healthcare reform, the Japanese still see the U.S. as a rich source of new revenue.
"Even if the U.S. carries out healthcare reform it's not as if the market is going to halve," Dainippon Sumitomo President Masayo Tada told reporters. "It will remain the world's biggest drug market."