Buying Finland’s Star to secure a European base (1997)

What it bought was not products but procedure

Counted as product rights and a factory, what Santen received from Star in 1997 looks small. What it actually acquired at Tampere was an organization able to run the whole sequence — manufacture a drug to European rules, obtain approval country by country, explain it to physicians and sell it. The American and Taiwanese offices opened around the same time stayed research posts and sales windows; only Europe came with a manufacturing body attached. That difference goes a long way toward explaining why Europe, alone, reached profitability — after nine years.

Even so, it took a long time before anyone could say the judgement had been right. The Dutch holding company was voluntarily wound up after six years, and European operating income first turned positive only in the year to March 2006. Yet when Santen absorbed Merck’s ophthalmic drugs in 2014 and had to create new companies in Britain, Italy and Spain, it could use, unchanged, a Nordic and Eastern European sales network already seventeen years old. The company bought in Finland in March 1997 became the foundation of a European business selling $210.7M (¥26bn) in the year to March 2016.