Japanese pharmaceutical giant Takeda, which produces the controversial diabetes drug Actos, is expanding its U.S. reach with an $800-million takeover of URL Pharma Inc. The move comes as Takeda’s U.S. profits are set to contract after Actos loses its patent protection later this year.
Among other drugs, Philadephia-based URL manufactures Colcrys, an oral drug that is used to treat gout flare-ups. Colcrys is URL’s top moneymaker, earning the company $430 million in revenue last year.
Takeda is Japan’s largest pharmaceutical company, but most of its sales revenues come from the United States, according to the Associated Press. Its top-earning drug Actos (pioglitazone HCl), an insulin-resistance reducer used to treat type 2 diabetes, has been among the top ten most-prescribed and highest grossing drugs in the U.S. since its debut in 1999.
In 2010, Actos sales accounted for more than 10 percent of all prescription drug sales in the United States, earning Takeda and co-manufacturer Eli Lilly a healthy $3.5 billion.
A number of post-market studies have indicated Actos patients are exposed to a greater risk of developing bladder tumors and cancer. Depending on dose and duration, studies indicate the increased risk of developing bladder cancer while on Actos may be as high as 40 percent. Such studies prompted France and Germany to ban the drug; yet despite its risky safety profile, the U.S. Food and Drug Administration (FDA) continues to allow its sale in the United States.
Drug companies typically push to develop and acquire new drugs when patents on their old blockbuster drugs are set to expire – a transition that, in Takeda’s case, will allow other companies to produce and sell cheaper, generic forms of Actos. Loss of patent protection, especially on top-selling drugs, can dim the appeal of drug manufacturers that need to demonstrate their profitability to shareholders and potential investors.
According to the AP, “analyst Naomi Kumagai said in a research note the deal was “puzzling” because she couldn’t explain “how much value will be brought from the enhancement of the gout franchise.”
Takeda’s purchase of URL is expected to be completed within the next 60 days.