Bain Capital, an investment firm that has spread its life sciences bets mainly across companies developing novel new medicines, is acquiring Mitsubishi Tanabe Pharma Corporation in a multi-billion dollar deal that brings a portfolio of products marketed globally along with a drug pipeline spanning several key therapeutic areas.
Mitsubishi Tanabe Pharma, also known as Tanabe Pharma, is the pharmaceutical division of Mitsubishi Chemical Group. Under deal terms announced Friday, this pharma unit, which traces its origins to a Japanese business started in 1638, will split off from its corporate parent to join Bain. The deal values Tanabe Pharma at 510 billion Japanese yen (about $3.3 billion).
According to Mitsubishi Chemical Group financial reports, Tanabe Pharma generated 437.4 billion yen (about $2.89 billion) in revenue for the fiscal year ended March 31, 2024. That’s down 18.3% from the prior fiscal year. Meanwhile, the unit’s 62.9 billion yen (about $415.5 million) in R&D spending topped the R&D spending for all of the conglomerate’s divisions combined. In a Friday investor presentation, Mitsubishi Chemical Group said the pharma unit requires large-scale investment to strengthen its R&D capacity and growth, which is not feasible under the current ownership.
“We carefully explored the best owners for Mitsubishi Tanabe Pharma to achieve future growth, and we have reached a conclusion that promoting a growth strategy under Bain Capital, which has extensive investment experiences in healthcare, is the best option,” the conglomerate said.
Boston-based Bain Capital outbid other investment firms for Tanabe Pharma, Bloomberg reported, citing unnamed sources familiar with the matter. While Bain has made healthcare investments throughout its history, the firm made life sciences an area of focus with 2016 formation of Bain Capital Life Sciences. Its investments include Aiolos Bio (acquired by GSK), Cardurion Pharmaceuticals, Cerevel Therapeutics (acquired by AbbVie), and Kailera Therapeutics. This past September, Bain Capital Life Sciences announced its fourth fund with $3 billion in total commitments.
Tanabe Pharma currently focuses on immunology and inflammation; vaccines; central nervous system disorders; and diabetes and metabolic disease. The unit’s top-selling product is the amyotrophic lateral sclerosis drug Radicava, which accounted for 79.2 billion yen (about $523 million) in revenue for the fiscal year ended March 31, 2024. Its portfolio also includes the Eli Lilly diabetes drug Mounjaro, which it sells in Japan under an agreement with the U.S. pharma giant.
Tanabe Pharma employs more than 5,000 people globally. Bain said the Japanese company will continue to develop innovative drugs internally while also seeking new opportunities for growth through business development, including licensing deals and strategic acquisitions. In Friday’s acquisition announcement, Ricky Sun, a partner at Bain Capital Life Sciences, said the investment firm believes there are promising signs for growth and untapped opportunities in Japan’s life sciences industry following government and regulatory initiatives to accelerate the development and approval of innovative medicines in the Japanese market.
“This is an exciting opportunity to leverage our team’s clinical insights and company creation support to build out a scale platform focused on long-term fundamental drug development in areas of significant unmet need to ultimately bring transformative medicines to patients in Japan and globally,” Sun said.
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