When Daiichi Sankyo of Japan announced its takeover of Ranbaxy of India this year, the deal raised eyebrows as a rare example of a developer of patented medicines acquiring an aggressive generic drug maker.
If the corporate cultures may be difficult to match, there is a commercial case to be made for innovative drug companies seeking to diversify their product portfolio into off-patent medicines at a time when successful new product development is proving so elusive.
Daiichi Sankyo may be particularly shrewd in tapping Indian expertise in Japan's own small, but fast-growing generic market, at a time when Tokyo authorities are seeking ways to reduce spiralling healthcare costs. But this week's high-profile action by the US Food and Drug Administration against Ranbaxy - the second in just a few months - presents it with a rather more immediate challenge.
Daiichi Sankyo ought to have been aware of the problems during its due diligence, although may well not have anticipated the extent of the FDA's response. Certainly it stressed yesterday that the latest news would not set back its acquisition plans.
Before it spends too much thinking about further expansion as an enlarged group within Japan, it may now have to invest rather more money and management time than it planned in improving operations within India.
FT
If the corporate cultures may be difficult to match, there is a commercial case to be made for innovative drug companies seeking to diversify their product portfolio into off-patent medicines at a time when successful new product development is proving so elusive.
Daiichi Sankyo may be particularly shrewd in tapping Indian expertise in Japan's own small, but fast-growing generic market, at a time when Tokyo authorities are seeking ways to reduce spiralling healthcare costs. But this week's high-profile action by the US Food and Drug Administration against Ranbaxy - the second in just a few months - presents it with a rather more immediate challenge.
Daiichi Sankyo ought to have been aware of the problems during its due diligence, although may well not have anticipated the extent of the FDA's response. Certainly it stressed yesterday that the latest news would not set back its acquisition plans.
Before it spends too much thinking about further expansion as an enlarged group within Japan, it may now have to invest rather more money and management time than it planned in improving operations within India.
FT
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