Mitsubishi eyes drug merger

Mitsubishi Chemical has confirmed that its Mitsubishi Pharma subsidiary is holding merger talks with Tanabe Seiyaku Co. to form Japan's sixth largest drug company. The firms have not come to any agreement, Mitsubishi Chemical says. But Nihon Keizai Shimbun, Japan's largest business newspaper, reports that the companies have already agreed to a framework under which Tanabe would take over Mitsubishi Pharma. In turn, Mitsubishi Chemical would acquire more than 50% of the merged entity, the report says. There has not been a big drug deal in Japan since early in 2005 when Sankyo and Daiichi Pharmaceuticals decided to merge. Mitsubishi Pharma and Tanabe both have strengths in drugs for circulatory diseases but have not launched major new products in recent years, the newspaper reports. Meanwhile, Mitsubishi Chemical says its chief technology officer, Yoshimitsu Kobayashi, will become president and CEO on April 1. The current CEO, Ryuichi Tomizawa, will become chairman, and the current chairman, Kanji Shono, will step down.