March 20, 2008
Takeda Pharmaceutical: Joint Venture With Abbott to Split
Takeda Pharmaceutical and Abbott Laboratories have announced the imminent conclusion of their joint venture, TAP Pharmaceutical Products. The value of TAP has become questionable in recent years, and the decision to end the partnership is expected to be a positive strategy for both parties. TAP's flagship drugs are to be divided between both companies.
Japanese pharmaceutical company Takeda Pharmaceutical and US-based Abbott Laboratories are to conclude their joint venture, Takeda-Abbott Pharmaceutical Products (TAP). The deal, expected to close within 60 days, will see the 31 year old joint venture split equally between the two companies. Takeda will retain rights to blockbuster PPI drug Prevacid and all pipeline products, and Abbott will gain full ownership of oncology drug Lupron.TAP, which operates in the US market, achieved sales of $3.1 billion last year. Takeda has reportedly long been interested in gaining full control of the venture, but the companies have struggled to agree a buyout price. Its value has also come under question in recent years in the face of slowing sales of both Lupron and Prevacid, and the potential for damaging generic competition to Prevacid by late 2009, following expiration of its patent.
The decision to divide the joint venture will benefit Abbott, which leaves a venture that has become steadily less important to its earnings. In addition, Lupron, with annual sales of $600 million and patent protection until 2015, will complement Abbott's decision to develop its presence in the oncology market. Abbott is also entitled to future payments from Takeda based on the success of TAP's pipeline drugs, including ulcer treatment TAK-390 and gout drug Febuxostat, which are both currently under review by the FDA.
The deal will also work in Takeda's favor, providing it with a late-stage US pipeline and an established reputation in the US market. With market conditions in Japan becoming increasingly challenging, many of the nation's pharmaceutical firms are seeking to boost their presence in the US, which is the world's most lucrative drug market. The conclusion of TAP is believed to be a welcome and lucrative strategy for both Abbott and Takeda, despite the joint venture's successful history.