"Daiichi gets a foothold in India"

Japanese major Daiichi Sankyo’s buyout of India’s largest pharma company Ranbaxy Laboratories has paved the way for the $8.2 billion drug discovery company to acquire one of the world’s largest generic product basket that will give it tremendous global reach. The Japanese company will now own India’s largest pharma company and will be among the largest generic companies in the world.

Daiichi Sankyo, Japan’s second largest pharma company, with little presence in India, recently started operations in the country. It recently set up a wholly-owned subsidiary Daiichi Sankyo India with an investment of Rs 25 crore. The subsidiary is headed by V Vijayendran, incidentally an ex-Ranbaxy executive. This wholly-owned subsidiary primarily focuses on cardiology and diabetology segments. It recently signed a marketing alliance with GSK India to launch its hypertension drug in India.

Previous to its merger with Daiichi, Sankyo had a small JV with an Indian partner called Unisankyo. Post merger with Daiichi in 2005, Sankyo Daiichi now holds 39.9% in the JV while the remaining 60.1% stake in this venture is held by a group of local promoters led by Jay Soman. The JV manufactures and markets bulk drugs, probiotics and few pharmaceutical products. The Japanese company has been keenly looking at launching a range of products including patented drugs in India, at a competitive price. For the same, it has been looking at outsourcing its manufacturing to Indian companies. The company can now use the manufacturing facilities of Ranbaxy for both Indian and global markets. To tap the research talent and cost advantage, the company was also looking at setting up a research facility in India.

Ranbaxy will provide the Japanese company immediate entry to Eastern Europe and Africa where the Japanese major has little presence. Daiichi will also have immediate access to thereuptic segments such as anti-infective and anti-inflammatory where Ranbaxy has a strong presence. About 20% of Ranbaxy’s sales come from emerging markets, which Daiichi Sankyo is keen to tap. Ranbaxy Laboratories has subsidiaries in 49 countries and its products are sold in over 150 countries.