Daito Pharmaceutical has signed a share transfer agreement for the takeover of Kyorin Pharmaceutical's generic business by a jointly funded company that it, Meiji Seika Pharma and the Development Bank of Japan (DBJ) are to set up. Daito says the deal is meant to strengthen its base as a research-oriented contract manufacturer.
Structure and timetable
The plan has not been completed. Kyorin's Inami and Takaoka plants and its authorised-generic business are to move through an absorption split, a corporate restructuring that transfers a business unit into another entity. Some authorised-generic sales activity continues.
The new company is due to be set up in December 2026 with capital of ¥100mn. Its directors will be nominated by the three partners. The absorption split is scheduled for March 31, 2027, and closing and the integration phase for April 1, 2027.
Takaoka, established in 2024, has capacity of up to 2bn tablets a year. Inami, established in 1975, has capacity of about 600mn. Daito plans to fund its own stake with bank borrowing.
The presentation gives no price. It says the effect on Daito's current-year consolidated results will be minor and that the medium- and long-term effect will be disclosed later.
The quarter behind it
For June to August, Daito's sales fell 8.6% to ¥11.9bn and operating profit fell 28.7% to ¥712mn. Net profit attributable to owners rose 0.6% to ¥700mn. Full-year guidance is unchanged at ¥54.0bn in sales and ¥4.0bn in operating profit.
The board also approved a buyback of up to 1.25mn shares, 4.4% of shares outstanding excluding treasury stock, for up to ¥2.0bn, with the shares to be cancelled.