On Monday, Asia’s largest drug company, Takeda Pharmaceutical of Japan, formally announced that will sell its Consumer Healthcare portfolio (TCHC) of over-the-counter medicines to private equity’s Blackstone Group for JPY 242 billion ($2.3 billion).
The portfolio includes over-the-counter medicines and health products that generated revenues of more than JPY 60 billion in the 2019 fiscal year, including best-selling vitamin B supplement Alinamin and multi-symptom cold remedy Benza-Block.
In a statement announcing the sale, Takeda President and CEO Christophe Weber said the Blackstone transaction will enable Takeda to focus more nimbly on its five key R&D areas: gastroenterology, rare diseases, oncology, neuroscience and plasma-derived therapies (where the company earlier this year joined a consortium led by rare diseases biotech CSL Behring to develop a plasma-derived therapy for covid-19).
Shedding non-core assets
In recent months, Takeda has shed three different non-core portfolios in the Asia-Pacific, Europe and Latin American markets. In June, Takeda announced that the sale of 18 drugs marketed in the Asia-Pacific region to Celltrion —until recently a portfolio company of New York-based middle-market private equity firm One Equity Partners—for up to $278 million.
In April, it announced the sale of European-marketed non-core products, including the blood-thinner Warfarin, along with two manufacturing sites in Denmark and Poland, to Danish generic drugmaker and parallel importer Orifarm Group for up to $670 million.
And in March the company announced the sale of non-core products in Latin America to Hypera Pharma for $825 million. That deal made Hypera the largest Brazilian drug company by market cap.
Real estate has also been part of the recent wave of divestitures. In February, it announced the sale of its 70-acre campus in Deerfield, Illinois to Ireland’s Horizon Pharmaceuticals for $115 million.
Takeda anticipates a pre-tax gain of JPY 140 billion on the sale of shares of the subsidiary, to be recognized when the transfer of shares is executed and completed.
And a Bain deal…
This is the second major private equity deal targeting the Japanese health care sector in recent days. Last week, K.K. BJJ-44, an affiliate of Bain Capital, won a bid to acquire Nichii Gakkan, which provides nursing home, medical support and childcare services to the Japanese consumer market, for JPY 122 billion ($1.15 billion).
After an initial offer to buy the company in May, Nichii Gakkan was approached with a last-minute counteroffer from Baring Private Equity Asia as well as pushback from multi-strategy alternative assets management LIM Advisors Limited, representing existing Nichii Gakkan shareholders, who felt the offer significantly undervalued the company.