TOKYO, Nov 12 (Reuters) - Japanese drugmaker Otsuka Holdings plans to sell about $2.8 billion worth of shares in December, marking the world's largest initial public offering in the pharmaceuticals sector. Japan's IPO market has been in the doldrums with the exception of Dai-ichi Life Insurance Co's $11 billion listing in April, which was the biggest IPO in Japan this year. Otsuka Holdings, a two-year-old umbrella company for 145 subsidiaries and affiliates with 39,000 employees, is listing on the Tokyo Stock Exchange to fund rising costs for developing drugs and expanding its operations globally. "The timing of the IPO is not necessarily good considering generally weak market condition in Japan," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. "Obviously more supplies would be negative to the market, but we don't have to be overly pessimistic considering that the IPO of Otsuka has been talked about many times in the past so we aren't surprised." Otsuka will sell 80 million shares at 2,400 yen each, including 41.3 million treasury shares, while shareholders will sell 10 million shares. Otsuka will also sell as many as 4.5 million shares in a possible green shoe option. Otsuka's IPO would top Merck KGaA's $1.7 billion offering in 1995 as the world's biggest pharmaceuticals IPO, according to Thomson Reuters data. The shares will be start trading on Dec. 15 after setting the offer price on Dec. 6. The IPO would also be the second largest in Japan this year after Dai-ichi Life, the nation's second largest life insurer Peformance of this year's big IPO shares have been discouraging. Shares in Dai-ichi Life ended at 115,000 yen on Friday, 18 percent below its offer price. Paltec Corp, a wholesaler of cosmetics and detergents, which would rank as the No.3 IPO this year after Otsuka, closed at 1,346 yen, 39 percent below its the offer price. Japan's IPO volume reached 770 billion yen so far this year thanks to Dai-ichi's giant deal, compared with 28 billion yen a year ago, according to Thomson Reuters. data Otsuka is 12.4 percent owned by its founder and family members, according to an earlier company filing. The estimated offer price would value the company at more than 1.3 trillion yen ($15 billion), ranking Otsuka behind only three other drugmakers in Japan -- Takeda Pharmaceutical , Astellas Pharma and Daiichi Sankyo -- and roughly on a par with Eisai Co, Japan's No.4 drugmaker. The drug business traces its roots to the Japanese island prefecture of Tokushima, where founder Takesaburo Otsuka started a small chemical factory in 1921. OTSUKA PROFIT Otsuka had a net profit of 67.4 billion yen on revenues of 1.08 trillion yen in the year to March 2010, making it Japan's second-biggest pharmaceuticals group after Takeda in terms of revenues. Otsuka Pharmaceutical, the biggest unit of the holding firm, developed schizophrenia drug Abilify and teamed up with Bristol-Myers Squibb to sell it in the U.S. and other markets. It also sells sports drinks, instant meals and skincare products. Tatsuo Higuchi, 60, the president of Otsuka Holdings, took the helm in July 2008 when the holding firm was established. Born in Tokyo, he studied fishery and food chemistry at a graduate school of Hokkaido University in northern Japan and joined Otsuka Pharmaceutical in 1977, hoping to someday globalise the firm, which barely operated outside Japan at that time. Research and development costs at Otsuka have been on the rise, in line with trends in a broader drug industry that is staging an increasingly costly race to develop successors to major drugs losing patent protections. Otsuka Holdings spent 152 billion yen on research and development, mostly on drugs, last business year, up 12 percent from the year before. ($1=82.37 Yen) (Reporting by Yumiko Nishitani, Junko Fujita, Chikafumi Hodo and Sachi Izumi; Editing by Lincoln Feast and Joseph Radford) ((firstname.lastname@example.org; +81 3 6441 1803; Reuters Messaging: email@example.com))Keywords: OTSUKA/ . Keywords: OTSUKA/ Keywords: OTSUKA/ (If you have a query or comment on this story, send an email to firstname.lastname@example.org) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.
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