Japan - Sawai Group Holdings Co., Ltd. (Sawai Group, Head office: Osaka, Japan, President: Mitsuo Sawai) announced that its Board of Directors, at a meeting held on January 16, resolved to transfer all shares of Sawai America Holdings Inc. (SAH), a holding company of its U.S. business, as well as its interests in Sawai America LLC (SAL) and interests in Upsher-Smith Laboratories, LLC (Upsher-Smith), both of which are subsidiaries of SAH, to Bora Pharmaceutical Holdings, Inc. (Bora).
At the same time, Sumitomo Corporation of Americas (SCOA), a co-investor in SAL, will also transfer its interests to Bora.
The transfer of these shares is planned to be executed subject to the approval of the United States antitrust authorities and in accordance with other laws and regulations.
Stifel served as exclusive financial advisor to Sawai, Sumitomo, and Upsher-Smith on this transaction. Debevoise & Plimpton LLP serves as transaction counsel and Katten Muchin Rosenman LLP as antitrust counsel to Sawai, Sumitomo and Upsher-Smith in this transaction.
The Reason for the Transfer of These Shares
In 2017, Sawai Group acquired Upsher-Smith with the goal of full-scale entry into the U.S. market, the world's largest generic drug market. Since this acquisition, we have sought business growth by implementing a variety of measures, including the consolidation/closure of factories, enhancing production capability, and increasing the pipeline capacity.
Despite our dedicated efforts, the business environment became increasingly complex as the top three purchasing groups strengthened their buying capabilities and competitors, particularly from India, intensified price competition. Consequently, in the fiscal year ending March 2022, we recorded significant impairments of goodwill and other assets. To address these challenges, we undertook proactive measures such as streamlining back-office operations, implementing cost-cutting initiatives, and restructuring our R&D framework and development strategies.
Given these circumstances, Sawai Group discussed various options with its co-investor, Sumitomo Corporation Group. From the discussion, it was recognized that bold product investment strategies and additional investments to effectively utilize Upsher-Smith's new factory will be needed to stay ahead of its competitors. On the other hand, Sawai Group needs to prioritize the investment of management resources in the Japanese business to solve quality issues and expand demand in Japan. Therefore, Sawai Group decided that the best option would be to sell the shares and interest of the U.S. business to Bora, a globally recognized CDMO with a global commercialization arm who is eager to invest in the U.S. pharma business and effectively utilize Upsher-Smith's new factory capacity, and concluded an agreement regarding the transfer of these shares.
Contact:
Email: koho@sawai.co.jp
SAWAI GROUP HOLDINGS CO., LTD. 
