Takeda to buy Abbott stake in U.S. venture: source

TOKYO (Reuters) - Takeda Pharmaceutical Co, Japan's biggest drug maker, plans to spend some $5 billion to buy out Abbott Laboratories Inc in their 50-50 U.S. venture, a source briefed on the matter said on Wednesday.

The deal, which would strengthen Takeda's U.S. sales operations, would be the biggest overseas acquisition by a Japanese drug firm and follow Eisai Co Ltd's purchase of cancer specialist MGI Pharma this year for $3.9 billion.

With Japan's drug market showing little growth, the nation's largest pharmaceutical firms are looking to boost their presence in the world's biggest drug market as well as replenish their pipelines.

Astellas Pharma Inc recently bought U.S. biotech firm Agensys Inc, while Daiichi Sankyo Co Ltd has embarked on a major U.S. expansion.

The source, who declined to be identified as the agreement has not yet been announced, said Takeda was in talks to make TAP a wholly owned unit costing it around 500 billion yen ($5 billion) and aimed to complete the deal by the year-end.

Takeda, which has earmarked $10 billion for major investments including acquisitions, has been trying to gain full control of TAP Pharmaceutical Products for a decade but has been at odds with Abbott over the price.

"If they are paying $5 billion, it does sound a little expensive so it's not a deal to get all excited about, but it's good that they've finally got it out the way," said Daiwa Institute of Research analyst Kumi Miyauchi.

"Now they know how much they are paying, it frees them up more to pursue other deals."

TAP, whose main product is heartburn drug Prevacid, had sales of about $1.5 billion in the April-September period last year.

Prevacid's patent will expire next year although TAP is seeking approval for a modified release version of the drug, which it hopes will fend off generic competition.

Takeda spokesman Seizo Masuda said the drug maker had made no decision on buying TAP. Abbott declined to comment.

The Nikkei business daily said Takeda aims to minimize the amount of cash it will need to put up for the acquisition by transferring TAP's prostate cancer treatment, Lupron, as well as the rights to some experimental medicines to Abbott.

Takeda plans to merge TAP with wholly-owned firm Takeda Pharmaceuticals North America, it said.

Daiwa Institute's Miyauchi said that with Prevacid's loss of patent protection coming up, it was important for Takeda to gain control of TAP before key sales staff started leaving the firm.

Takeda shares rose 1.9 percent to 4,960 yen, underperforming the overall market, but outperforming the drug sector subindex IPHAM, which was up 0.3 percent.

(Editing by Michael Watson)