Sep. 3--TOKYO -- Dainippon Sumitomo Pharma Co. said Thursday it has agreed to buy U.S. pharmaceutical maker Sepracor Inc. for about $2.6 billion (around 240 billion yen) in an attempt to tap into the world's largest drugs market amid saturated demand at home.

Sepracor, a Nasdaq-listed company which deals with drugs including those to treat respiratory and central nervous system disorders, will become a wholly owned unit of Dainippon Sumitomo Pharma America Holdings Inc., a U.S. subsidiary of the Japanese drugmaker.

The Osaka-based firm, which has depended on the domestic market for more than 90 percent of its consolidated annual sales, is now keen to cash in on the huge U.S. market as there are slim chances for growth in the Japanese market as the country's population declines.

"Growth in the Japanese market is highly limited. We decided (our business) will taper off if we continued to operate only at home," Dainippon Sumitomo President Masayo Tada said at a press conference in Tokyo.

The buyout move follows a recent raft of acquisitions of foreign pharmaceutical makers by Japanese drugmakers also eager to strengthen their global profiles in the face of the anemic Japanese market.

Dainippon Sumitomo, a subsidiary of Sumitomo Chemical Co., said it will soon launch a tender offer under which it will pay $23 for each outstanding Sepracor share, representing a 27.6 percent premium to its closing price on Tuesday.

The deal will be financed by around 50 billion yen ($540 million) in cash at hand and about 200 billion yen ($2.16 billion) in bridge loans.

The company plans to start marketing Lurasidone, currently an experimental drug to treat schizophrenia, in the United States in 2011 and is eager to gain access to Sepracor's strong sales network in the country, including around 1,200 sales professionals.

"Going to the United States is inevitable if we want to maximize our product potential," Tada said, adding the acquisition of Sepracor would raise its overseas sales ratio to around 40 percent from less than 10 percent at present.

Sepracor, based in Massachusetts, currently markets six U.S. Food and Drug Administration-approved drugs, including Lunesta to treat insomnia and Xopenex for asthma, and other additional drugs in Canada.

"The transaction should enable Sepracor to enhance its product pipeline and enjoy sustainable growth well into the future," Sepracor President Adrian Adams said in a statement.

Last year, Japan's top drugmaker Takeda Pharmaceutical Co. bought out Millennium Pharmaceuticals Inc., also based in Massachusetts, while Daiichi Sankyo Co. brought Ranbaxy Laboratories Ltd. of India under its wing. Shionogi & Co. has made Atlanta, Georgia-based Sciele Pharma Inc. into a wholly owned unit.

-----

To see more of Kyodo News International, go to http://www.kyodonews.com

Copyright (c) 2009, Kyodo News International, Tokyo

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

4506, SEPR, 6417, 4568, 4005, 4502, 4507,

A service of YellowBrix, Inc.