The Health Care M&A Monthly: Irving Levin Associates, Inc. Speaks with Eisai, Inc.

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Eisai Co. Ltd. (T: 4523), through its American subsidiary, is acquiring four oncology-related products from Ligand for $205.0 million, or 3.87x revenue. The products include ONTAK, Targretin capsules, Targretin gel 1% and Panretin gel 1%. Eisai’s goals in strengthening its oncology franchise are noted in the interview below.
--excerpt from pg 15 of October issue
We at Irving Levin got the chance to discuss Eisai Co. Ltd.’s recent acquisition of four oncology products from Ligand Pharmaceuticals with Cathy Pollini of Eisai, Inc.

IL
Congratulations on the deal, and thanks for agreeing to answer some of our questions. How does the acquisition of the four oncology-related products fit into Eisai’s overall drug portfolio?

CP
Oncology is one of Eisai’s long-standing therapeutic areas of focus, and we have several global drugs in development for the treatment of patients with cancer, including compounds for breast cancer, soft-tissue sarcoma, prostate cancer and ovarian cancer, among others. The acquisition of four oncology-related products from Ligand, pending government approvals, as well as the valuable expertise and experience of those Ligand personnel to whom Eisai will offer employment, will serve to help establish Eisai’s global oncology business. In addition, it will enable Eisai to enter the oncology market, gain experienced talent and infrastructure, and enhance expertise in advance of building a product portfolio to include other potential acquired assets as well as our pipeline products.

IL
Do you believe that you have the marketing channels that would allow you to increase the revenue produced from the sale of these four products?

CP
We are confident that Eisai will be able to successfully market the four oncology-related products, pending government approvals. According to Ligand, total annual revenue of the four products was $53 million last year. We hope to sustain growth of all four products.

IL
What competition do you see for these four products, and what special features does Eisai bring to the table to gain market share from that competition?

CP
While we can’t speak for other companies, we can say that oncology is one of Eisai’s long-standing therapeutic areas of focus. Increasing therapeutic specialization of pharmaceutical companies–from R&D to business development–is essential for success in an increasingly challenging marketplace. Eisai has long employed this strategic approach, and we focus our efforts on three therapeutic areas – neurology, gastrointestinal disorders and oncology/critical care. We will continue investing in these key therapeutic areas and, therefore, will continue to grow our reputation as a leader and innovator in these categories.

IL
Do you contemplate further acquisitions of related products to develop the oncology niche further? If so, what kinds of products would you be looking at and in what time frame?

CP
Moving forward, we believe we will achieve greatest growth through a combination of efforts–research and development, in-licensing/acquiring promising new products in our therapeutic areas of focus, establishing strategic alliances and producing specialty products that satisfy unmet medical needs and contribute to the health and well-being of people worldwide. We can achieve this goal independently or in collaboration with other companies. One of the greatest opportunities for Eisai’s future lies in our pipeline, which includes oncology compounds in clinical development for breast cancer, soft-tissue sarcoma, prostate cancer and ovarian cancer, among others. Approximately 15% of Eisai’s worldwide revenue is spent on R&D.