Tokyo: Japan’s No.3 drugmaker Daiichi Sankyo intends to keep its Indian subsidiary Ranbaxy Laboratories listed, Daiichi’s incoming president said on Friday, denying persistent talk that Daiichi may turn Ranbaxy into a fully owned unit.
Daiichi Sankyo bought a 64% stake in Ranbaxy, a generic drug maker, in 2008 for ¥488 billion ($5.37 billion).
Indian media have reported that Daiichi Sankyo may be seeking to buy all the other shares in Ranbaxy to better control the subsidiary, which has had exports of some of its products to the United States banned due to alleged data falsification.
“Ranbaxy has a strong brand and is highly respected as a good firm, and I think one reason for this is the fact that it is recognised as a good drugmaker listed in India. And we do not find any inconvenience in operating it listed and as it is,” Daiichi Sankyo executive vice president Joji Nakayama told Reuters in an interview.
Nakayama will replace Takashi Shoda as the company’s president and CEO on 28 June, if approval is given by shareholders.
He also said Daiichi Sankyo seeks to rely on external resources, such as through an acquisition or joint venture, to strengthen its cancer drug business.
Japanese drugmakers, hampered by rising hurdles to develop next-generation blockbuster products, have been active in the global acquisition market, seeking to beef up their product pipelines and portfolios.
Most recently, Japan’s No.2 drugmaker Astellas Pharma, which expects a slump in earnings this year amid a lack of flagship next-generation drugs, agreed to buy US cancer specialist OSI Pharmaceuticals.
“We are looking very hard for acquisition targets. Everyone in the industry is basically doing the same,” Nakayama said.
“We do not limit our options to acquisitions, but we need a measure, including such as joint ventures, to adapt external resources and accelerate growth when it comes to the area of cancer,” he said, adding that there were other areas in which it could adapt external resources.
Nakayama did not specify the size of possible acquisitions. After the pricey Ranbaxy deal, Daiichi Sankyo needs to repay debt and enhance its ability to raise funds so as to make other acquisitions.
“Looking for acquisition targets and improving acquisition capability don’t go together, but we will proceed always with both in mind,” Nakamaya said.