Acquisition of Millennium will not make up Takeda’s losses in generic competition

TOKYO Upon the announcement of Takeda Pharmaceutical Co.’s acquisition of Millennium Pharmaceutical, shareholders have expressed concerns over the company’s decision. The purchase of Millennium is not seen as a revenue booster to counter competition from generic companies over its best-selling diabetes drug, Actos, according to published reports.

Millennium’s purchase price was $8.8 billion, but will give the company only one product, Velcade, a blood-cancer medicine that made $800 million last year, while Actos saw revenues of $3.4 billion. Actos accounts for 40 percent of Takeda’s revenue and its patent will expire in 2011.

According to published reports, the deal to takeover Millennium has been following a trend by Japanese companies seeking growth abroad because of their strength against the dollar as well as government price cuts and a lack of new medicines from their research studies. Since Takeda is looking to expand and strengthen its cancer business, the acquisition of Millennium seemed like a solid step forward. They will be marketing Velcade and believe they can generate sales of $1 billion in the U.S. and $2 billion worldwide.

Kumi Miyauchi, a drug analyst with Daiwa Institute of Research in Tokyo said, “As Takeda faces the expiration of the Actos patent, it needs to make effective use of its financial resources to make up for it. Competition is severe, especially in the cancer drug business, so Takeda has had to speed things up.”