Takeda Expects to Save 40 Billion Yen by Ending Abbott Venture

Takeda Pharmaceutical Co., Japan's largest drugmaker, expects to save about 40 billion ($402 million) in three years from ending a venture with Abbott Laboratories, spokesman Seizo Masuda said.
The companies on March 19 agreed to end their TAP Pharmaceutical Products venture and divide its value. Takeda will add more than half the 1,600 sales staff at TAP to its own U.S. subsidiary, which has 2,300 employees selling its products, Masuda said in an interview today.

Ending the venture with Abbott will also allow Osaka-based Takeda to cut the costs of drug development when it merges the operations, he said. The agreement will strengthen Takeda's business overseas and help offset an erosion in earnings caused by biennial cuts to the price of prescription drugs mandated by Japan's government.

Earnings per share may rise by as much 6 percent, Toshihide Yoda, an equities analyst at Lehman Bothers Japan Inc., said in a report today. He reiterated his ``overweight'' rating on Takeda's stock.

Abbott will get rights to the prostate cancer treatment Lupron and Takeda will have rights to the ulcer drug Prevacid, the companies said when they announced the agreement. They expect to complete the transaction within 60 days.

Takeda will pay Abbott about $1.5 billion over five years, on the basis of Prevacid sales and future products, Abbott spokeswoman Melissa Brotz said after the announcement.
TAP was formed in 1977 and had revenue of $3.1 billion last year from Lupron and Prevacid, the companies said.

Takeda will take the rights to two other TAP drugs under consideration by the U.S. Food and Drug Administration for marketing clearance.

Takeda doesn't expect any effect on profit for the fiscal year ending March 31, it said when the agreement was announced.

Takeda rose 40 yen, or 0.8 percent, to 5,090 yen on the Tokyo Stock Exchange today. Abbott rose 2.3 percent to $55.66 on the New York Stock Exchange yesterday.

Source : www.bloomberg.com

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