Market Dynamics and Financial Trajectory for the Biologic Drug: TachoSil
Introduction
TachoSil, a biologic therapeutic drug in the form of a surgical patch, has been a significant player in the medical field, particularly in controlling bleeding during surgical procedures. Here, we will delve into the market dynamics and financial trajectory of TachoSil.
What is TachoSil?
TachoSil is a fibrin sealant patch designed to control bleeding in surgical settings. It is a biologic product that leverages the body's natural clotting process to achieve hemostasis.
Market Position and Usage
TachoSil has been widely used by medical professionals to manage bleeding during surgeries. Its effectiveness in this niche has made it a valuable asset in the biologics market, which is increasingly dominated by biologic therapeutic drugs[3].
Ownership and Divestitures
TachoSil has changed hands several times, reflecting strategic decisions by its parent companies.
Takeda Pharmaceutical Co. Ltd.
Initially, TachoSil was owned by Takeda Pharmaceutical Co. Ltd. Following Takeda's acquisition of Shire in 2019, the company sought to deleverage its business by divesting non-core assets. TachoSil was one such asset, contributing $155 million in net sales during the 2018 fiscal year[2].
Sale to Ethicon (Johnson & Johnson)
In 2019, Takeda announced an agreement to sell TachoSil to Ethicon, a subsidiary of Johnson & Johnson, for approximately $400 million. However, this deal was terminated due to anti-trust concerns raised by the European Commission[5].
Sale to Corza Health
Subsequently, Takeda entered into an agreement with Corza Health to sell TachoSil for €350 million ($422.4 million) in cash. This deal was completed in 2021, with Corza acquiring the assets and licenses for TachoSil's development and commercialization. Takeda retained ownership of the manufacturing facility in Linz, Austria, and entered a long-term manufacturing and supply agreement with Corza[5].
Financial Impact
The sale of TachoSil has had significant financial implications for Takeda.
Revenue Contribution
TachoSil contributed nearly $160 million in net sales to Takeda's bottom line as of March 2020. This revenue, although substantial, was part of the non-core business segments that Takeda aimed to divest to focus on its core pharmaceutical business units[5].
Debt Reduction
The proceeds from the sale of TachoSil were used by Takeda to reduce its debt and align with its financial goal of achieving a net debt to adjusted EBITDA ratio of two times within the fiscal years 2021-2023[5].
Market Dynamics
The biologics market, within which TachoSil operates, is experiencing rapid growth.
Market Growth
The global biologics market is projected to grow significantly, with estimates suggesting it will reach $717.0 billion by 2031 from $402.07 billion in 2023, at a CAGR of 7.76% from 2024 to 2031[3].
Competitive Environment
The biologics market is highly competitive, with market exclusivity dynamics shifting due to the emergence of biosimilars. Biosimilars offer cost-effective alternatives to original biologic pharmaceuticals, enhancing patient access and driving market penetration[4].
Technological Advancements
Advancements in drug delivery technologies and the use of biotechnological processes such as recombinant DNA technology and gene editing are driving the growth of the biologics market. These technologies enable precise therapies with minimized adverse effects[3].
Key Takeaways
- Ownership Changes: TachoSil has been sold twice, first to Ethicon (a deal that was terminated) and then to Corza Health, reflecting Takeda's strategy to focus on core business areas.
- Financial Contribution: TachoSil contributed significantly to Takeda's revenue but was divested to reduce debt and focus on core pharmaceutical business units.
- Market Growth: The biologics market, including products like TachoSil, is expected to grow substantially, driven by technological advancements and the emergence of biosimilars.
- Competitive Landscape: The market is highly competitive, with biosimilars playing a crucial role in market dynamics.
FAQs
What is TachoSil used for?
TachoSil is a surgical patch used to control bleeding during surgical procedures.
Who currently owns TachoSil?
TachoSil is currently owned by Corza Health, following its purchase from Takeda Pharmaceutical Co. Ltd. in 2021.
Why did Takeda sell TachoSil?
Takeda sold TachoSil as part of its strategy to deleverage its business and focus on core pharmaceutical business units such as gastroenterology, rare diseases, plasma-derived therapies, oncology, and neuroscience.
How much did Corza Health pay for TachoSil?
Corza Health paid €350 million ($422.4 million) in cash for TachoSil.
What is the impact of the sale on Takeda's financials?
The sale helped Takeda reduce its debt and move closer to its goal of achieving a net debt to adjusted EBITDA ratio of two times within the fiscal years 2021-2023.
Sources
- BCC Research: Biologic Therapeutic Drugs: Technologies and Global Markets
- MedTech Dive: Takeda sells TachoSil patch to J&J's Ethicon for $400M
- BioSpace: Biologics Market Worth USD 717.0 Billion From 2024 to 2031
- FTC: Biologics Market Dynamics: Setting the Stage for Biosimilars
- Medical Device Network: Takeda sells TachoSil surgical patch to Corza Health for $422.4m
