Daiichi-Sankyo's $5.3 billion acquisition of India's biggest drugmaker will help the Japanese company compete in the US markets with rivals such as Mylan and Israel-based Teva Pharmaceuticals and climb to become the world's 15th largest pharmaceutical company.  

"The acquisition is of importance for Daiichi-Sankyo as it can access the vast generic empire of Rannbaxy, especially the US market where Daiichi-Sankyo is not present at all. Over $90 billion patented drugs are going off-patent in the near future and even now more than 45 per cent prescriptions in the US are for generic drugs.

Thus it is an important move on the part of an original drug research company to attach generic business portfolio," noted Ranjit Shahani, the vice-chairman and managing director of Novartis India [Get Quote].
 
Ranbaxy [Get Quote] earns about a fourth of its revenue from the US. Before the Ranbaxy takeover, Daiichi-Sankyo, was ranked 22nd in sales among the global pharmaceutical companies. Sankyo had its origin in 1899 when a small pharmaceutical company named Sankyo Shoten was started jointly by three entrepreneurs -- Matasaku Shiobara, Shotaro Nishimura and Genjiro Fukui.
 
The company, which started its business by launching a digestive enzyme, went on to become one of the largest pharmaceutical companies in Japan with the name Sankyo Co. In 2005, it decided to merge with Daiichi Pharmaceutical Co, another pharmaceutical major in Japan, which was started in 1915 by an entrepereneur named Dr Katsuzaemon Keimatsu.
 
The �5.88 billion deal, announced in February 2005, made the Daiichi-Sankyo combine the second largest pharmaceutical company in Japan after Takeda Pharmaceuticals. Daiichi Sankyo is a joint holding company for Daiichi Pharmaceutical Company (Daiichi) and Sankyo Company. The combined entity had a turnover of over $7.9 billion during the financial year ended March 2007, an increase of 0.4 per cent over 2006.
 
"This acquisition will help us gain access to over 60 countries from the current 21 countries, besides extensive presence in emerging markets and this is part of our plans to become a global pharmaceutical innovator company," according to Takashi Shoda, the president and CEO of Daiichi-Sankyo.
 
Daiichi Sankyo has strength in manufacturing a wide portfolio of original patented drugs in the field of cardiovascular diseases and nervous disorders. In May this year, Daiichi Sankyo had acquired a privately held biotechnology company named U3 Pharma in Germany for about Euro150 million ($235 million) to access its novel biologic drug programmes.
 
Daiichi-Sankyo manufactures prescription drugs, diagnostics and radio-pharmaceuticals and over-the-counter drugs. The company has a global network and operates in Japan, the US, Germany, the UK, Spain, Italy, Portugal, Austria, Switzerland, the Netherlands, Belgium, Finland, France, Germany, China, Taiwan, Korea and Thailand. It is headquartered in Tokyo, Japan and employs approximately 18,400 people, according to research firm Data Monitor.
 
"This acquisition will help the Japanese drug major access to cost-effective manufacturing at one-fifth to one-tenth of manufacturing costs in Japan. It can effectively relocate manufacturing of many of its products to Ranbaxy's global quality manufacturing plants in India," said Ranjit Kapadia, the head of pharmaceutical research at Prabhudas Liladhar.
 
Daiichi-Sankyo had started a subsidiary in India, Daiichi Sankyo India Pharma, earlier this year with an investment of Rs 25 crore (Rs 250 million) and with plans of starting own manufacturing and marketing facilities in India.

It signed a co-promotion agreement with GlaxoSmithKline [Get Quote] Pharma for its anti-hypertensive drug Olmesartan Medoxomil and its combination products in May 2008 to enter the Indian market.

The Hyderabad-based Unisankyo, a joint venture of Sankyo with a group of Indian promoters, was the first Japanese joint venture in India. The JV manufactures some bulk drugs, probiotics and a few pharmaceutical products.
 
Daiichi Sankyo has strength in manufacturing a wide portfolio of original patented drugs in the field of cardiovascular diseases and nervous disorders. In May this year, Daiichi Sankyo had acquired a privately held biotechnology company named U3 Pharma in Germany for about Euro150 million ($235 million) to access its novel biologic drug programmes.
 
Daiichi-Sankyo manufactures prescription drugs, diagnostics and radio-pharmaceuticals and over-the-counter drugs. The company has a global network and operates in Japan, the US, Germany, the UK, Spain, Italy, Portugal, Austria, Switzerland, the Netherlands, Belgium, Finland, France, Germany, China, Taiwan, Korea and Thailand. It is headquartered in Tokyo, Japan and employs approximately 18,400 people, according to research firm Data Monitor.
 
"This acquisition will help the Japanese drug major access to cost-effective manufacturing at one-fifth to one-tenth of manufacturing costs in Japan. It can effectively relocate manufacturing of many of its products to Ranbaxy's global quality manufacturing plants in India," said Ranjit Kapadia, the head of pharmaceutical research at Prabhudas Liladhar.
 
Daiichi-Sankyo had started a subsidiary in India, Daiichi Sankyo India Pharma, earlier this year with an investment of Rs 25 crore and with plans of starting own manufacturing and marketing facilities in India. It signed a co-promotion agreement with GlaxoSmithKline Pharma for its anti-hypertensive drug Olmesartan Medoxomil and its combination products in May 2008 to enter the Indian market.
 
The Hyderabad-based Unisankyo, a joint venture of Sankyo with a group of Indian promoters, was the first Japanese joint venture in India. The JV manufactures some bulk drugs, probiotics and a few pharmaceutical products.