Daiichi Sankyo reportedly selling OTC unit for $900M in pivot to oncology — but company says it's 'incorrect'
Daiichi Sankyo has countered a news report that it’s looking to sell its over-the-counter subsidiary for about $900 million, once again dispelling speculation that’s been widely circulated as the drugmaker consolidates operations around its growing oncology unit.
Japanese publication Nikkei Business first reported that Daiichi Sankyo is in talks with several companies to sell Daiichi Sankyo Healthcare, which sells pain patches, cold medicines, nutritional supplements and the like. In March, unnamed sources told Reuters that the company had hired JP Morgan to advise on a potential deal.
Within hours, the Tokyo headquarters offered a brief response:
Although Daiichi Sankyo is constantly examining the potential for a variety of strategic developments with the aim of sustainable business growth, this reporting is not correct.
The denial treads the same lines that Daiichi chairman and CEO Joji Nakayama adopted last month in an earnings call when an analyst flat out asked if he is considering the sales of the unit.
“I have been saying that we will sell our non-core assets and will focus on core businesses,” he said. After elaborating on how they might reorganize the non-core business if the core gets stronger, he concluded: “The more we become focused, the more things there will be for us to consider in the future. However, we have not decided anything as to what you mentioned.”
Having made a fortune and a name for itself on the blood pressure drug Benicar (Olmesartan), Daiichi Sankyo is now facing a big revenue drop from patent loss and has been betting on cancer as its next big break.
Its bag is a mixed one so far: While an antibody-drug conjugate targeting HER2 expressing cancers has the endorsement of AstraZeneca in the form of a multi-billion pact, FDA experts shot down its pitch for an acute myeloid leukemia drug days ago despite giving thumbs up on another rare tumor treatment.
Kristoffer Tripplaar for Sipa USA. AP