The period prior to the acquisition saw the pharmaceutical Industry consisting of six largest pharmaceutical companies - Pfizer, Merck, Eli Lilly, Schering-Plough, Bristol-Myers Squibb, and Abbott Laboratories accounting for a combined sales exceeding $137 billion.
Changing forces within the Industry:
The year 2007 saw the industry entering into a new era because of the current model becoming obsolete. The forces that resulting in the changes were:
• Pressure on sales due to large number of high revenue drug patents on the verge of expiring over the next five years. Also the drugs in the pipeline were not expected to earn as much revenue as that coming …show more content…
As a result of the same, the company lays a lot of emphasis on safety and looks in for a mutual benefit for all its business partners. The board has strived to create a culture of quality across the entire value chain.
The coming together of Ranbaxy and Daiichi was considered as the energy of synergy as it empowered the firm with the status of the 15th largest pharmaceutical company. Both Ranbaxy as well as Daiichi had key strengths which they believed would help in building a strong base for the company. It was meant to be a match of the largest generic player in India and one of the largest innovator companies in Japan.
Strengths of Ranbaxy:
• One of the key advantages that worked in favour of Ranbaxy was that it always strived to be an international company and thus had a geographic mix of global sales. Thus it was not totally dependent on any particular region or country. In the year 2007, the company had 526 global regulatory filings and 457 approvals and the company also focused on new chemical entity research by demerging its NDDR unit into a separate …show more content…
This merger led to the formation of a new innovative product line with around 22% of their net sales being invested in research and development.
The main focus for Daiichi Sankyo’s area of research and development has been malignant neoplasm, diabetes mellitus, autoimmune disorders and thrombotic disorders. Strengths of Daiichi Sankyo:
• Daiichi Sankyo’s strength has primarily been in proprietary medicines which are medicinal compounds whose formula and often mode of manufacture are owned by an individual or a corporation under a trademark or patent
• Company has constantly been focusing on development of new drugs and its core business features blockbuster model
• Research collaborations were entered into with global pharmaceutical majors with one of the prime example being that of a tie up with Eli Lilly for developing the high-potential Prasugrel anti-platelet agent for the treatment of acute coronary syndrome
• Daiichi prior to the merger had a highly integrated supply chain network with a sales force comprising of 850 medical representatives
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