Eyes on Asia: Bain Capital buys MTPC, Merck & Co. halts HPV vax, and IlluminaEyes on Asia: Bain Capital buys MTPC, Merck & Co. halts HPV vax, and Illumina

Bain Capital buys Mitsubish Tanabe Pharma Corporation

Private investment firm Bain is set to acquire Mitsubish Tanabe Pharma Corporation (MTPC) for $3.3 billion in a carve-out transaction from parent company Mitsubishi Chemical Group Corporation. Bain’s private equity teams in Asia and North America are leading the investment with the company’s life sciences team.

“We believe there are promising signs for growth and untapped opportunities in Japan’s life sciences industry as government and regulators have launched several initiatives to accelerate the development and approval of innovative medicines in the Japanese market,” said Ricky Sun, partner at Bain Capital Life Sciences.

“This is an exciting opportunity to leverage our team’s clinical insights and company creation support to build out a scale platform focused on long-term fundamental drug development in areas of significant unmet need to ultimately bring transformative medicines to patients in Japan and globally.”

Under the terms of the deal, MTPC will operate as an independent company. In turn, Bain said it will benefit from its expertise in the space and access to capital.

“Tanabe Pharma has been delivering innovative medicines to Japanese patients for centuries, and we are proud to partner with MTPC and support its next phase of growth and evolution,” said Masa Suekane, partner and head of Japan Healthcare, Industrials and Financial Services at Bain Capital Private Equity.

“As a standalone, independent company, the Company will benefit from the full support of Bain Capital’s global resources and our healthcare team’s extensive experience driving value creation across the healthcare value chain.  We look forward to a collaborative partnership with MTPC and helping build a best-in-class Japanese pharma platform.”

The transaction is anticipated to close in the third quarter of this year.

Merck puts Gardasil on pause in China

In its Q4 2024 earnings report, Merck & Co. (known as MSD outside of the US and Canada) said it is “temporarily pausing” shipments of its HPV vaccine Gardasil in China until at least the middle of this year to “accelerate inventory reduction.”

“As we closed out 2024 and entered 2025, the market dynamics for Gardasil in China have remained challenging,” CEO of Merck, Robert Davis, said during its earnings call.

“Like many other companies, we've seen increased pressure on discretionary consumer spending, including across the vaccine space more broadly, and demand for Gardasil has not recovered to the level we had expected. As a result, overall channel inventory remains elevated at above-normal levels.”

The shutdown of shipments comes just one month after the firm received approval in China from the National Medical of Products Administration (NMPA) for Gardasil to be used in males between 9-26 years old for HPV-related diseases and cancers.

Merck has withdrawn its $11 billion sales target for Gardasil by 2030, citing economic uncertainty in China. "Given the uncertain timing of an economic recovery in China, we feel it is prudent to withdraw this target," CFO Caroline Litchfield told analysts and investors on a call.

Gardasil sales totaled $1.6 billion in Merck’s fourth quarter of 2024, a decline of 17% year-on-year. The company said the lower sales were “primarily due to lower demand in China”, which has been known since last summer. However, it also added the loss has been “partially offset by higher demand in most international regions, particularly in Japan.”

Illumina placed on watchlist

In response to US president Donald Trump’s additional 10% tariff on imports from China, DNA sequencing focused firm Illumina (and other businesses) have found themselves placed on the “unreliable entities list” by the China Ministry of Commerce.

During the firm’s Q4 2024 earnings call, CEO of Illumina Jacob Thaysen reminded those listening that China represents 7% of the firm’s global revenue “and we continue to see significant opportunity to bring our innovations to the healthcare ecosystem there.”

However, he confirmed the decision to be placed on the list “is new information” as the firm has “only known this a few days.” Thaysen said because of this he does not want to comment too much on timelines, but said Illumina is “in dialogue with the relevant parties and we would like to keep that dialogue between the parties before we have more insights here.”

“We believe the opportunity in China is vast and we will work through the current challenges with speed and hopefully get a resolution as fast as possible.”