Japan's largest drugmaker Takeda Pharmaceutical is in talks to buy privately-held Swiss rival Nycomed for more than $12bn (£7.39bn) in a bid to extend its global reach into Europe and emerging markets, according to sources with direct knowledge of the matter.
The purchase would offer the mainly Asia and U.S-focussed maker of drugs for diabetes and heart disease access to a lung disease drug, Daxas, just approved in the United States, and a portfolio of over-the-counter consumer products.
Broadening Takeda's horizons and revenue base is something analysts said was key to its future success and could explain a hefty suggested price tag of more than $12bn.
"The suggested price looks high, but in the sector M&A is starting to happen and there are not enough companies to buy," Kepler Capital Market analyst Tero Weckroth said. "Mid-cap pharma is a real sweetspot for M&A."
Credit Suisse analyst Fumiyoshi Sakai said Takeda "has to survive as a global player. It's not in a position to go backwards."
Nycomed is well placed to deliver in faster-growing markets and says emerging markets made up nearly two-fifths of revenue in 2010 and should make up 60 percent of sales by 2015. Emerging markets sales leapt 30 percent last year.