Daiichi Sankyo has found a buyer for its $3.6bn holding in India’s Sun Pharmaceutical almost immediately after putting the stake up for sale.
Yesterday, the Japanese pharma company said it planned to sell all or part of the shares it held in Sun, which were acquired after the completion of the merger between the Indian firm and Daiichi Sankyo’s Ranbaxy unit last month.
Around 215 million shares held by Daiichi Sankyo – equivalent to around 9% of Sun Pharma’s total shares – were sold off in a series of block transactions yesterday at an 11% discount to its previous closing share price, putting pressure on the stock which fell more than 10% yesterday.
The share sale brings a turbulent chapter in Daiichi Sankyo’s history to a close as it disposes of an asset which has weighed heavily on its operations for several years.
The Japanese firm bought a two-thirds share in Ranbaxy for $4.7bn in 2008, hoping to tap into the growth for generic medicines in emerging markets.
However, the Indian firm was almost immediately beset by a series of quality problems at manufacturing facilities which led to some of its products being blocked for import into the US, EU and other markets, and eventually resulted in a $500m fine by the US authorities in 2013.
Problems have continued since the fine, however. Last December, a fresh ban was imposed by the EU on a cephalosporin antibiotic made at a Ranbaxy plant that failed a Good Manufacturing Practice (GMP) inspection, while a plant making active pharmaceutical ingredients (API) fell afoul of an FDA audit earlier in 2014.
Daiichi Sankyo investors seemed to welcome the end of the saga, with shares in the company gaining almost 3% yesterday after news of the sale emerged.
The merger of Sun and Ranbaxy created the world’s fifth largest speciality generic pharmaceutical company and India’s biggest drugmaker.