Acquiring Noven Pharmaceuticals by tender offer (2009)

Buying the twenty-two years it could not build

Twenty-two years had passed between placing a sales subsidiary in the United States in April 1987 and this acquisition. In that time the over-the-counter Salonpas Pain Relief Patch did win US FDA approval in 2008, but no organisation grew up that could develop, gain approval for and sell a prescription drug in America. What carried the price tag presented on 14 July 2009 — $16.50 a share, roughly $430 million including the stake already held — was neither a drug nor a factory. It can be seen as the organisation itself, the 610 employees with which Noven Pharmaceuticals, founded in that same year of 1987, was running.

What the price tag shortened, however, reached only as far as the organisation. The effect Hisamitsu cited for the acquisition was a short payback from buying a self-sustaining company already generating profit. What generated that profit were Daytrana and Vivelle-Dot, Noven’s own products. That it was a company earning from the day it was bought also means that those earnings turned independently of Hisamitsu’s technology. Money buys an organisation someone else has finished building, not the products still to be made. What the company that shortened twenty-two years with a price tag took on next appears to have been another decade — the time needed to bring two technologies together into a single drug.