Japan’s Takeda Pharmaceutical Co Ltd is reportedly in the final stages of making arrangements to sell its domestic over-the-counter (OTC) business to US investment fund Blackstone Group Inc.
Takeda (TAK), Japan’s largest pharma company, has been reducing its OTC assets worldwide as it seeks to refocus its business and reduce debt following its $59 billion acquisition of Shire, Reuters reported citing Kyodo News.
Blackstone (BX) was among final bidders for the OTC unit, it was reported in June, along with Bain Capital, CVC Capital Partners and Taisho Pharmaceutical Holdings Co Ltd.
Furthermore, Takeda is looking to sell Takeda Consumer Healthcare, known for its Alinamin line of energy drinks, for more than 300 billion yen ($2.85 billion) by the end of the month, according to the Kyodo report.
A Takeda spokeswoman declined to comment to Reuters on the report beyond saying it had not come from the company. A Blackstone representative was not immediately available for comment.
The Shire acquisition, completed in January 2019, expanded Takeda’s drug pipeline and diversified its global sales, but also left it heavily indebted. To reduce the debt, Takeda has pledged to dispose of $10 billion worth of non-core assets.
Earlier this month, Novavax (NVAX) announced a partnership with Takeda to sell up to 250 million doses of NVX‑CoV2373, its COVID-19 vaccine candidate, per year in Japan.
Takeda’s NYSE-traded shares are currently up 2.3% and are trading at $ 19.30 in the pre-market session.
BX shares have recouped most of their losses but are still down 4.2% since the beginning of the year. Looking ahead, the average analyst price target of $61.88 indicates 16% upside potential is lying ahead over the coming year.
Meanwhile, Oppenheimer analyst Chris Kotowski at the end of last month maintained a Hold rating on the stock, saying that his current valuation framework suggests that the stock is fairly valued.
“We view the stock as an attractive core growth holding, but near-term it is trading at roughly a 15% premium to the S&P, roughly in line with its average last year,” Kotowski wrote in a note to investors.
Overall BX scores a cautiously optimistic Moderate Buy analyst consensus which breaks down into 5 Buys versus 4 Holds. (See Blackstone stock analysis on TipRanks).
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