Takeda Pharmaceutical Co is splashing out $8.8 billion to acquire the USA’s Millennium Pharmaceuticals in a move that gives Japan’s largest drugmaker access to the oncology agent Velcade.

Takeda said it will finance the acquisition through cash on hand and there is no financing condition to the tender offer or second step merger. It expects the deal to enhance earnings starting in the fiscal year ended March 2010 before transaction-related amortisation.

Specifically, Takeda has made a cash offer of $25 per share to get hold of the Massachusetts-based firm, which represents a premium of around 53% on Millennium’s closing share price on Wednesday. The attraction of the deal is Velcade (bortezomib), which is currently indicated for the treatment of patients with multiple myeloma and mantle cell lymphoma, and had first-quarter sales of $83.5 million, up 42%. At the beginning of the year, forecast Velcade turnover of $320-$345 million for 2008, which was seen as a conservative estimate in some quarters.

Takeda’s president Yasuchika Hasegawa added that the deal “further enhances its pipeline with clinically differentiated, high-quality product candidates”. This includes a potential therapy for inflammatory bowel disease, which is expected to enter Phase III clinical trials in late 2008/early 2009.

Millennium’s management team, led by chief executive Deborah Dunsire, will stay on and Mr Hasegawa added that “our strong desire is to retain Millennium employees, who have created an entrepreneurial and innovative culture”.

The purchase shows Takeda’s determination to get a major foothold in the USA at a time when domestic growth is flat. The firm has equally divided its 30-year US joint venture with Abbott, Tap Pharmaceuticals, a move regarded as positive by analysts and earlier this month a deal potentially worth $320 million was signed with US firm Cell Genesys which will see the Japanese drugmaker get access to the latter’s late-stage prostate cancer treatment GVAX.