Takeda-Shire In India: Sleeping Giant?
Executive Summary
Will Takeda take a less measured approach in India, where Shire brings it a significant on-market portfolio? Scrip outlines the current shape of things in the promising but complex emerging market as the two companies head towards combining forces globally.
Takeda Pharmaceutical Co. Ltd. has generally been keen to do more in emerging markets like India, but the Japanese major has hitherto been somewhat tentative about a sharp ramp-up in the country. The $62bn planned acquisition of Shire PLC may now give it just that required impetus to push things forward, adding portfolio girth and momentum for future growth in a nation that is expected to see greater focus on healthcare as it tackles the growing burden of non-communicable diseases alongside infectious ailments. India also has an estimated 70 million patients with rare diseases.
While both companies indicated that it was early days to comment on the final shape of a Takeda-Shire combine in India including whether Shire may stay stand-alone for now or whether a realignment in Takeda’s alliances was likely, the deal could expand the duo’s scope of play in India.
Takeda told Scrip that it was committed to making more of its products available locally, and had successfully registered some of its innovative and potentially life-saving medicines.
“We are making good progress in making them available to help meet patients’ unmet medical needs,” the company said.
Details on the clinical trials registry of India reflect studies for Takeda’s diabetes therapy Nesina (alogliptin) and Entyvio (vedolizumab), among other products, though the regulatory status on these could not be immediately ascertained.
Takeda is also collaborating with partners to “expedite access” to potentially life-saving vaccine candidates which are expected to address some of today’s most challenging infectious diseases. The Japanese company referred, in particular, to its partnership with Zydus Cadila to tackle chikungunya, an emerging infectious disease in the Indian sub-continent, Africa and Asia. (Also see "Takeda-Zydus Enter Increasingly Crowded Chikungunya Fray" - Scrip, 20 Sep, 2016.)
Takeda set up an India arm, Takeda Pharmaceuticals India Pvt. Ltd, in 2011 and also has a Nycomed legacy joint venture, Zydus Takeda Healthcare Pvt. Ltd., with Zydus Cadila. Zydus Takeda Healthcare is a 100% export-oriented unit and manufacturing activity said to be exclusively undertaken for Takeda. It has two manufacturing plants – one for active pharmaceutical ingredients and a site for manufacturing the key starting materials of pantoprazole sodium.
Takeda had also entered into licensing agreements with the Indian vaccines manufacturer Biological E Ltd for the transfer of technology to enable the production of affordable combination vaccines for lower income countries, though the latest on this could not be ascertained immediately. (Also see "Biological E Taps Takeda Tech For Affordable Combo Vaccines" - Scrip, 27 Jun, 2017.)
Takeda’s Measured Approach, Shire Portfolio
Nevertheless, Takeda’s general tone on India, over the years, appears more measured compared to its bullish outlook in 2010 when it outlined plans with medium- to long-term strategies for business expansion in India.
"The basic plan consists of the strategies for expanding the Takeda group’s presence in India which is and will be one of the fastest growing pharmaceutical markets. At the same time, Takeda will pursue innovation, productivity and cost-effectiveness as a whole within the Takeda group, by leveraging world-class capabilities at competitive costs in research, development, CMC [chemistry, manufacturing and control], toll-manufacturing services, and IT services that India offers," the Japanese group said in Oct. 2010.
Specifics on progress made in the various segments could not immediately be ascertained, but things don’t appear to have played out to their full potential, at least going by what some industry observers say. Concerns around India's intellectual property policies and the still raging controversy around the disastrous Daiichi Sankyo Co. Ltd.- Ranbaxy Laboratories Ltd. deal may also have tempered Takeda’s plans, though there’s no official word on this. (Also see "Daiichi Demands Court Block Fortis Sale Until Singhs Pay $550m Arbitration Award" - Scrip, 10 Apr, 2018.) In 2016, Takeda “realigned” certain teams amid plans to provide sustainable access to its medicines under a new leadership in India. (Also see "New Takeda India Leadership Amid Realignment" - Scrip, 3 Jul, 2016.)
For now Tachosil (absorbable fibrin sealant patch) is the only key product available to patients in India “via Takeda”, while the Japanese company has also out-licensed pantoprazole in India, it confirmed to Scrip.
Shire, on the other hand, told Scrip it has nine products available in India - largely in the hematology segment. These are: Advate, Recombinate, Hemofil M, Immunate, Rixubis, Immunine, FEIBA, Flexbumin and Human Albumin NG. Shire, which is reported to have delivered strong growth in India in FY17, has been engaged alongside the non-profit Hemophilia Federation (India) in efforts to expand awareness around hemophilia and its management; there are an estimated 130,000 hemophilia patients in India, but both diagnosis and access to care are woefully inadequate in the country.
Some analysts have suggested that Shire's hematology franchise may be a potential divestment candidate, though Takeda’s CEO, Christophe Weber, while acknowledging competition in hemophilia is "very tight”, has underscored "good synergies" in the segment. (Also see "Takeda Poised To Move Into Pharma Top 10 With Shire Combination" - Scrip, 8 May, 2018.)
Shire expects the combination with Takeda to create a leading global biopharmaceutical company driven by innovative R&D with the scale to drive future development. “We believe the combined company would be well positioned to deliver highly-innovative medicines and transformative care for patients around the world,” Shire told Scrip. The Dublin-headquartered Shire has 90 employees in India.
Early Days
Both Takeda and Shire, however, said that it was early days to provide any details on the potential combine’s structure in India.
Shire said that it was too early to speculate “which facilities would be affected”.
“After the transaction closes, we will learn more about the integration plan and how our country organizations fit into the future structure. The acquisition is subject to shareholder approval of both companies as well as regulatory approvals and we expect it will close in H1 of 2019.”
Takeda said that it is too early to comment on its proposed offer for Shire.
“Transactions like these are extremely complex and our offer is subject to an approval process that involves Takeda’s and Shire’s shareholders, as well as regulators and other stakeholders,” Takeda said.
Besides, since Shire is a UK-listed company, it falls under the jurisdiction of the UK Takeover Code, which stipulates certain rules for how it can proceed with, and publicly communicate, developments of the transaction.