Taisho gains approval for listing under new holding structure
This article was originally published in Scrip
Japan's largest over-the-counter healthcare company, Taisho Pharmaceutical, has gained regulatory approval in Japan for the listing of a new holding entity as part of its planned shift to a new corporate structure next month.
Taisho Pharmaceutical Holdings will be incorporated and listed on the Tokyo Stock Exchange through a share transfer on 3 October, in a move the firm says will allow it to more flexibly and strategically manage its business, improve the allocation of group resources and better respond to market needs.
Although no immediate impact on business results is expected, holding structures also have certain accounting and tax benefits and can facilitate borrowing for possible acquisitions, although Taisho made no mention of these factors. There were restrictions on this type of corporate structure in Japan until 1997, since which several other major diversified groups have set up holding entities, notably Otsuka Holdings in the pharma sector.
Taisho cited continuing weakness in Japan's OTC sector and the challenges of regular reimbursement price revisions and rising R&D costs to its prescription business as some of the other reasons for the shift. The transaction will see 0.3 shares of the holding group's common stock exchanged for one Taisho share, with Taisho's shares to be delisted on 28 September.
Taisho Pharmaceutical (which incorporates both the OTC and prescription businesses) will then become a wholly owned subsidiary of the holding group, with other subsidiaries and affiliates to be managed as a separate division. Current Taisho chairman and CEO Akira Uehara will continue in these positions in the holding group.
Taisho's prescription business logged sales of ¥101.4 billion ($1.3 billion; +2%) last fiscal year, accounting for 38% of the group net total and led by the macrolide antibiotic Clarith (clarithromycin) with ¥22.9 billion. The Phase II-heavy pipeline comprises mainly in-licensed projects and line extensions, with the oral SGLT2 inhibitor TS-071 for types 1 and 2 diabetes the stand out in-house molecule.
Taisho's 34%-held Japanese joint venture with Toyama (which is majority owned by Fujifilm) also has an agreement to co-market with Eisai in Japan the rheumatoid arthritis drug iguratimod, which has just been filed for approval.
Outside Japan, Taisho's main focus so far has been on building up its OTC presence in Asia, to which end it acquired selected products from Bristol-Myers Squibb's regional OTC business in 2009 and the Malaysian healthcare company Hoepharma Holdings earlier this year (scripintelligence.com, 8 April 2011).