The Ranbaxy – Daiichi Sankyo Deal

Presentation By,
104-Trupti Dhaygude 124-Upasana Naik
142- Vini Tanwani 144- Ruchi Vadodaria
 Scope of the presentation

• Daiichi and Ranbaxy’s background

• Pharma industry background
• Disease pattern of India and Japan
• About the deal and it’s financial
• Valuation by using multiples method
• Strategy of Daiichi behind choosing Ranbaxy
• Is this deal fitting Daiichi’s strategy so far
• How Ranbaxy will helped by being aquired by Daiichi
• Is Daiichi over bid?
 Pharma Industry Background

•The global pharma industry valued at $700 billion in 2007

• U.S. is the largest individual market with 46% share

•Japan is the second largest market with $70 billion market

•Rising cost and an agening population contributing to a wider use of generics

•180 day exclusive period by FDA therefore higher growth of generics

•The companies to strengthen R&D pipeline endeavored to grow bigger through M&A
 Daiichi - Sankyo

•Established in 2005 – Merger of 106 year old Sankyo Co. Ltd. And 90 year old Daiichi
Pharmaceutical Co. Ltd

•Japan based pharmaceutical company

•2300 overseas medical representative in 33 locations

•R&D centres in various parts of the world with around 2625 employees

•Olmesartan (Anti hypertensive drug) is the largest selling product of DIS.

•DIS grew at 4.7% in 2007 to $7.12 billion.

•DIS stood at 22nd rank in the global pharmaceutical market

•Currently DIS is operating in 21 countries

 Ranbaxy

•Founded in 1937 of its founder Ranjit Singh and Gurbax Singh

•In 1978 Ranbaxy became the first Indian company to develop a noval precess for the
manufacturing of antibiotic doxycyclin

•India’s largest pharmaceutical company

•Exports its product to 125 countries

•Ground operations in 46 countries

•Manufacturing facilities in 7 countries

•In 2007 Ranbaxy grew at 10% to $1.6 billion

•Ranbaxy stood at 50th rank in global pharma industry

 Disease pattern of India and Japan
India
•Size of Indian pharma industry was $17
billion in 2007
•60% domestic market and 40% exports
•In 1970 Indian Patent Act was a boon to
Indian pharma companies
•Exports to Japan was $180 billion in 2007-
08
•Growth driver of Indian pharma idustry
are strong IPR regime and growth of
generics market in US and EU
Japan
•In 1967 the policy for new grug approval
opened the door for generic drug industry
in Japan
•Avaerage population is on rise and so is the
healthcare cost
•Generic market interms of sales has been
grown from 3% to 3.5%
•During 2002-06 growth in sales of
Oncology,Diabetes and CNS grugs has been
much higher than that of Cardiovascular
drug
 The Deal

•On June 11, 2008 Daiichi Sankyo acquired a 34.8% stake in ranbaxy

•Valued at $2.4 Billion

•At Rs 737 per share

•DIS aquired shares issued by Ranbaxy on preferential basis

•23834333 warrants were alloted to DIS with each warrant represent 1 share converted at Rs
737 per share

•In November 2008, deal was completed by aquiring worth $4.6 billion ,63.92% stake in
Ranbaxy