October 23, 2006

Novartis eyes Japan animal health market with acquisition

An eFeedLink Exclusive

Livestock and pet animal health giant Novartis, announced its agreement to acquire the animal health business of Japan's Sankyo Lifetech. The move is an attempt to expand the Swiss group's presence in Japan.

The agreement provides for Sankyo Lifetech, a subsidiary of Sankyo Company to transfer its animal health business to a new company that Novartis Animal Health KK has agreed to acquire. This transfer would also include that of the staff and all marketing authorisations and intellectual property related to the commercialised brands and R&D portfolio.

Considering Sankyo's major foothold in the Japanese animal health market, Novartis could not have thought otherwise. "Novartis Animal Health is today under-represented in the Japanese animal health market. Our primary objective is to strengthen our position in one of the largest animal health markets worldwide and to broaden our offering to Japanese veterinarians, pet owners and farmers", says Andreas Buehlmann, head of communications, Novartis Animal Health, while explaining the rationale behind the move.

Some of the areas Sankyo has been working in include manufacturing, importing and selling veterinary pharmaceutical products, food additives, drug ingredients, pesticides for public health, household pest management services and other products.

The duo's collaboration is, however, not new. In 1990, they developed and commercialised milbemycin oxime, a broad-spectrum parasiticide. Marketed by Sankyo, it comes under the trade names Milbemycin A (heartworm control) and 'Systec' (combination product to control heartworm and fleas), which correspond to the Novartis brands 'Interceptor' and 'Sentinel'.

Most Novartis products are available by prescription through veterinarians. For livestock and farmed fish diseases, Novartis Animal Health offers prevention through vaccination as well as therapeutic products to treat parasitic and bacterial infections.

The company has not yet disclosed its immediate plans as Buehlmann clarifies that the acquisition is subject to approval by the anti-trust authorities and conditions of the agreement. The deal is expected to be completed by the end of March next year. "Until then, all details of the combined future business organisation will be worked out and communicated to our business partners," Buehlmann adds.

Novartis Animal Health has made strategic acquisitions in the past to either strengthen its position in specific markets or franchises. The company refuses to divulge any further details about the transaction.