Daiichi Sankyos Ranbaxy Acquisition Analysis

Daiichi Sankyos Ranbaxy Acquisition Analysis With the spiraling up healthcare charges and government expenditure on public healthcare, many developed countries are trying to promote generic drugs. The demand for generics is also complemented by wider access to healthcare in developing economies. This coupled with the expiry of many patented drugs around the corner, many brand name pharmaceutical companies tried to acquire generic drug companies, in this paper we try to analyze one such acquisition. On 11th June 2008, Daiichi Sankyo the third largest pharmaceutical company in Japan made an offer to buy control stake in Ranbaxy, the largest drug-maker by revenue in India. The purchase price of INR737 represented a premium of 53.5% over Ranbaxys average daily closing price on the National Stock Exchange for the three months ending on June 10, 2008 and 31.4% over closing price on June 10, 2008. In this paper we would analyze why Daiichi Sankyo must have picked Ranbaxy and Daiichis Strategy behind the acquisition. We also try to do the valuation of Ranbaxy at the acquisition time and whether Daiichi paid a hefty premium over its intrinsic value. Post-acquisition Daiichi Sankyos stock moved southwards, later in this paper we try to address this shareholder reaction. The acquisition was termed bad and Daiichi had a one-time writing down of $3.45 billion off its balance sheet. We also analyze what might have gone wrong in this cross-border transaction, issues such as lack of proper due-diligence on Daiichi Side and lack of transparency on Ranbaxy side. INTRODUCTION The pharmaceutical industry develops, produces, and markets drugs licensed for use as medications. Pharmaceutical companies can deal in generic and/or brand medications and medical devices. They are governed by a variety of geography specific laws and regulations regarding the patenting, testing and ensuring safety and efficacy and marketing of drugs. Its origins can be traced back to the nascent chemical industry of the late nineteenth century in the Upper Rhine Valley near Basel, Switzerland when dyestuffs were found to have antiseptic properties. Many of the modern pharmaceutical companies started out as Rhine-based family dyestuff and chemical companies e.g. Hoffman-La Roche, Sandoz, and Novartis etc. Over time many of these chemical companies entered into pharmaceuticals business and gradually evolved into global players. The industry expanded rapidly in the sixties, healthcare spending skyrocketed as global economies prospered in this period. In the seventies the industry evolved further with the introduction of tighter regulatory controls, especially with the introduction of regulations governing the manufacture of generics. The new regulations abolished permanent patents and allowed patent protection for branded products for fixed periods only, and a new competitive segment branded generics evolved in the pharmaceutical sp ace. With the patent expiries of many blockbuster drugs nearby and increasing demand for cheaper drugs, many pharmaceutical companies are trying to offer a generic drug portfolio as well. The fastest way to add this portfolio is the inorganic way; lets look at one such case wherein a Japanese Pharmaceutical giant acquired a large bracket Indian Generic drugs company. Daiichi Sankyo before Acquisition (Year ending March 2008) Daiichi Sankyo was Japans 3rd largest pharmaceutical company, established by the merger of Sankyo Co., Ltd. and Daiichi Pharmaceutical Co., Ltd in September 2005. Daiichi was mainly a brand, RD oriented pharmaceutical company with revenues of 880 billion yen ($8.8 billion) in FY 2007-08. The company was cash rich and had around ÂÂ ¥574 million in cash and cash equivalents. Its portfolio comprised of pharmaceuticals for hypertension, hyperlipidemia, and bacterial infections, the Group was also engaged in the development of treatments for thrombotic disorders and focused on the discovery of novel oncology and cardiovascular-metabolic therapies. With the shrinking Japanese market the company had a clear inclination towards overseas sales, the Overseas Sales/ Net Sales had steadily increased from 33% to 40% from 2005-2008, however markets other than the traditional Japan and North America were the ones which were showing real movement. The company clearly aimed to build Asia, South and Central America markets. Daiichi already had business operations in 21 countries and aimed to be a Global Pharma Innovator by 2015. In India they were already underway forming a Sales subsidiary. The Company also was trying to concentrate on its core pharmaceutical business by spinning off non-pharmaceutical businesses from the group. One of the mid to long-term goals of Daiichi was to increase its presence in novel therapeutics in oncology arena; on these lines they also acquired a German company named U3 Pharma AG. Ranbaxy before the Acquisition (Year Ending December 2007) Ranbaxy Laboratories Limited, Indias largest pharmaceutical company, was an integrated, research based, pharmaceutical company producing a wide range of quality, affordable generic medicines, used across geographies. The Company than served customers in over 125 countries and had an expanding international portfolio of affiliates, joint ventures and alliances, operations in 56 countries. Ranbaxys revenues and bottom lines were continiously on the rise since 2001, the RD expenses were stable around 6%. In FY 2007 the company had revenues of 69,822 million INR ($1.5billion) excluding other income. The earnings of the company were well diversified across the globe, however the emerging world contributed heavily to the revnues (Emerging 54%, Developed 40%, others 6%). However the Japan market, with low generics penetration contributed just $25 million to the top line. The company had just begun to re-orient its strategy in favour of the emerging markets. Ranbaxy had been on shopping spree in the previous year acquiring BeTabs South Africa, additional stake in Zenotech Laboratries, 14.9% in Jupiter Biosciences India and 13 Dermatalogy products from Bristoll Myers Squibb in the USA. The company was still open for acquisitions and growth through inorganic activities. To take advantage of the upcoming RD outsourcing story Ranbaxy also demerged the New Drug Discovery Research under Ranbaxy Life Science Research Limited (RLSRL). Ranbaxy also had developed great partnerships with companies focused on research and manufacturing in speciality and niche areas, two of which were collabrative research programs with Glaxo Smith Kline. Ranbaxy also had signed some exclsuive inlicensing aggrements with Global companies, Sirtex Australia being one of them.To optimize its First to File (FTF) opportunities and hence ensure the revenue flows, the company entered into 3 independent litigation settlments with GlaxoSmithKline (GSK) for Valacyclovir and Su matiptan and with Astellas Pharma for Tamsulosin. The company entered into segments such as Bio-generics, Oncology, Penems, Limuses, Peptides, etc. due to the high potential they offered. On the operational front too the company was aggressive and had reduced the working capital by almost 3% of sales. The company undertook the modernization and capacity expansion in plants in India, Romania, Malaysia, Nigeria and South Africa. The company also discontinued operations in some of their inefficient plants in India. The product, patent and API portfolio of the company was strong. The company made 526 product filings and received 457 approvals globally (Annexure A gives a detailed overview of the product, API and Patents in 2007). The company also continued its effort to develop effective herbal drugs that could comply with international quality standards. The Deal On 11th June 2008, Daiichi Sankyo made an offer to purchase more than 50.1% voting right in Ranbaxy which included 34.83% stake of promoters, preferential shares and an open offer. Daiichi offered a share price of INR 737 with a transaction value of around $4.6 billion, valuing Ranbaxy at $8.5 billion. Daiichi ended up acquiring 63.92% shares of Ranbaxy by Nov, 2008 (details are provided in Annexure B). Including transaction costs the deal costed Daiichi $4.98 billion (details are provided in Annexure C) and they recorded goodwill of $4.17billion (details are provided in Annexure D). For Daiichi Sankyo, in addition to the traditional high-risk/high-return business model employed in developed-country markets, Ranbaxys generic business model would help them build a hybrid business model with a mix of patented and generic drugs. The deal also required the current CEO/Promoter Malvinder Singh to stay with the company for 5 years. The deal financing was through a mix of debt and existing cash resources of Daiichi Sankyo. With the acquisition Daiichi got access to Ranbaxys basket of 30 drugs for which the company had approvals in the US, including 10 drugs for which Ranbaxy had exclusive sales right to sell for six months after the expiry of their patents. The deal gave Daiichi an access to best FTF 180 day exclusivity pipelines in the industry. Ranbaxy had already de-risked its FTF pipeline through a series of settlement with innovator companies; this in-turn lowered the litigation expense and removed uncertainty with regard to the launch date of these generic drugs. It also helped in better planning of inventory, launch quantities and supply agreement. DAIICHIS GAIN FROM THE DEAL The era of Generic drugs Most of the pharmaceutical companies in developed world have been concentrating on the patented drugs market, and hence were more RD oriented. But recently the generic drugs market has received more attraction because of: Dates of patent expiry of blockbuster drugs discovered during 1990s are nearing Governments and Insurers are encouraging use of generic drugs to control the spiraling up healthcare costs With saturation occurring in the developed markets, the major markets now are the emerging countries. However the earnings of the citizens in these nations are not high enough to buy the costly patented drugs, so generic low-price drugs form a majority part of the drug markets in these countries. These Pharmerging nations were forecasted to account for the biggest share of pharmaceutical industry growth over 2008-13 period, it was supposed to be a $160-190bn market by 2013. However majority of multi-national pharmaceutical companies were underpenetrated in these markets. With this changing market dynamics Daiichi made the decision to acquire a generic drug manufacturer from second largest populated country, India. This will help them establish presence in a new area (Generics) in the pharmaceutical value chain. India: an emerging hub for Global Pharma India in 2008 had gained a respected place in the in the space of Contract Manufacturing, Drug Development and Drug Discovery and Research. This had become possible due to a strong stream of talent flow, compliance with quality and regulatory standards, distinct cost advantages both in manufacturing and drug development. India also had a large naive patient pool with some of the fastest patient recruitment rates and an innovation and original research engine. Indias strength in this space was reflected by its research collaborations with global Pharmaceutical Companies. For Daiichi its RD expenses and COGS stood at around 45% of the Sales, shifting the RD and manufacturing to India made sense to operate in the highly competitive environment and address continuous pressures from government to reduce drug prices. Access to new markets Daiichi believed that realizing sustained business growth would need the expansion of its prescription drug business in advanced country markets along with tapping growth opportunities in developing countries. Ranbaxy had a strong presence in markets such as Africa, where Daiichi had never ventured. By using Ranbaxys network, Daiichi Sankyo could more than double its global reach from 21 countries currently to 56. As growth would slow in the developed markets, Ranbaxy will give Daiichi a strong position to expand their businesses in emerging markets including India, China, Russia and Brazil. Emerging Markets was a strong geographic component of Ranbaxys revenues. India was undoubtedly the biggest market that Daiichi would get access to now, the Indian market was supposed to triple by 2015 from its 2005 size. Ranbaxy with its strong distribution reach and excellent brand recognition was well positioned across the Indian metro and extra urban areas. Collaborations and Subsidiaries In order to optimize value at various points across the pharmaceutical value curve, Innovator Pharmaceutical and Generic Companies were moving from a competing business model to a collaborative one. On this front too Ranbaxy had strong collaborative projects with companies such as GlaxoSmithKline. Some of them were in Oncology space, Oncology being an area of focus both for Ranbaxy and Daiichi would greatly bolster its presence in this space. Ranbaxy itself had made many acquisitions in previous 2 years, BeTabs Pharmaceuticals South Africa being the recent one. These acquisitions made Ranbaxys position stronger in the Pharmaceutical space. Japan Markets Due to government measures to curb healthcare expenditure, in spite of growing prevalence of lifestyle diseases and aging population the Japan market was growing only quantitatively but not value wise. This government control on pricing is rare in many Asian countries and USA, making Japan an unattractive market. However in-line with encouraging the use of generic drugs, many Japanese hospitals were applying the diagnosis procedure combination (DPC) reimbursement system. The Japanese government was also making efforts to restrain drug-related expenditures through systemic reforms as well as other factors such as drug price revision under the National Health Insurance (NHI) scheme. So generic drugs was surely a promising business opportunity in the Japanese markets, in fact in FY 2008 Ranbaxy registered a sales growth of 38% in Japan (Sales of $20 million). However Daiichi later formed a new company in Japan for handling its generic space in Japan, the strategic intent of this step is a bit doubtful to me. OTC and Biogenerics Given the focus on OTC drugs by both the companies, opportunities existed to expand OTC product offerings of both Ranbaxy and Daiichi across world markets. Biogenerics was also a common interest area for both the companies, Daiichi had just acquired U3 pharma AG and Ranbaxy had acquired Zenotech in the Biogenerics space. Both of them could use each others expertise in clinical trial design, relationship with regulators and marketing power in the US and the EU RANBAXYS VALUATION We used simple DCF valuation methodology to valuate Ranbaxy stock in June 2008, with following assumptions: Sales will grow at 12% for 10 years (McKinsey projections for Indian Pharmaceutical industry) and then slowed down to 8% for 5 years. In order to account for the losses caused due to FDA action against Ranbaxy we have lowered the growth rates for 2008 and 2009 to 10% because Ranbaxy had made alternative arrangements through its US its subsidiary Ohm Labs in the US. NOPAT Margin maintained at 14% for 10 years and then lowered to 10%. The company is making continuous efforts to decrease the working capital so we assume they would decrease it till 25%. The Net Long Term Assets to Sales ratio would fall down to 45%. DCF Valuation 254.6 FTF Value 106 Investment in Associates 5.03 Total 365.63 With these assumptions we came to a value of INR 254.6 (details in ANNEXURE J, K); however this value does not incorporate the value the strong FTF pipeline that Ranbaxy had. This FTF pipeline is valued at around INR106/share (details in ANNEXURE E). Going further we also need to adjust the value for investment in associates (refer ANNEXURE F) for market value wherever information is available. The effective price as per our calculation for Ranbaxy in June 2008 should be INR 365.63. This shows how much premium Daiichi paid above the intrinsic value of Ranbaxy, with an acquisition price of INR 737, they paid almost a premium of 100% over the intrinsic value. I think this was a huge premium for a friendly takeover, suggesting that Daiichi would take long time to enjoy the real benefits of this acquisition. SHAREHOLDERS REACTION The market reaction to this announcement was positive only during the open offer period, post that both the stocks plunged to almost 50% of their pre-transaction values. In Feb 2009 in response to FDAs action against Ranbaxy share price of Ranbaxy was almost 1/3 of what Daiichi Sankyo had paid. Later the Ranbaxy stock moved up considerably but Daiichi was still trading a low levels. To reflect the fact that the market price for the shares of consolidated subsidiary Ranbaxy was way lower than the acquisition price, Daiichi recorded ÂÂ ¥351.3 billion one-time write-down of goodwill associated with the investment in Ranbaxy. This led to a considerable net loss for Daiichi in fiscal 2008. The write down itself signifies that the shareholders money, the retained earnings were wiped out in this acquisition and hence the southwards movement of stock price was as expected. The market expectations from Daiichi were low due to this write-down. WHAT MIGHT HAVE GONE WRONG? In September 2008 the FDA sent Ranbaxy warning letters regarding current good manufacturing practice violations at two of its plants Paonta Sahib and Dewas and forced restrictions on the import of drugs manufactured at these plants. This banned the entry of almost 30 Ranbaxy products in the USA. In February 2009, FDA also invoked its Application Integrity Policy (AIP) against the Paonta Sahib facility. The FDA enquiry had started long back in 2006 itself. According to the FDA report, Ranbaxys quality control scientists took shortcuts on the stability tests for at least two major drugs. They conducted these tests on the same day or within a few days of each other, not over nine months as claimed by the company. The FDA also claimed that Ranbaxy had submitted manipulated data as a part of its application to market new generic drugs in the US, as well as kept hundreds of improperly stored samples in its factories in Paonta Sahib and Dewas. This was partly to blame to the organizational structure of the company as well. Traditionally the analytical research and quality assurance (QA) departments always had firewalls between them; the QA department job was to keep a watch on the activities of the research unit. However in the recent past, Ranbaxy brought both departments together, encouraging the problems to stay confined within the walls of the company. Daiichi should have assessed the standard pharmaceutical organizational structure and also tried to estimate the full extent of the legal risk arising out of the US FDA letters. They should have asked for information on plant inspections done in 2006 and details of submissions made by Ranbaxy in defence. However the fact that a Japanese company like Daiichi decided to tackle the issue when presented with the problem rather than spending time evaluating the risk, was really impressive. Ranbaxy was said to have poor human resource practices, which led to high employee turnover. In research and development alone, four departmental heads had resigned in quick succession in the period just before acquisition. This phenomenon of resource attrition at Ranbaxy continued even after the acquisition. Mr Malvinder Singh the CEO and promoter of the company left the company in May 2009. In the original agreement he was to stay with Ranbaxy for 5 years after the acquisition. By leaving 4 years before the contractual date not only did he have to pay a hefty severance package but also raised doubt among foreign companies, looking for Indian partners. For a foreign company like Daiichi it was natural to rely on promoters and their team to continue running the company for a while. Daiichi paid INR 737 for a company with an intrinsic value of just INR 365. This valuation glitch clearly demonstrates Daiichis lack of understanding of generic business. I believe inadequate due diligence was done considering the size, scale and scope of the deal, reflecting Daiichis inability in understanding of India and the generic world. I also feel Daiichi was not able to properly access the possible impact of the ongoing FDA enquiry. Ranbaxy was also to blame for not being transparent about the actual status of the FDA enquiry. One more prominent thing that Daiichi probably missed on was the continuously increasing debt levels of Ranbaxy. The year of 2007 witnessed great currency volatility in response of unforeseen global financial crisis. Through 2007 until early 2008, INR steadily appreciated against the US Dollar. From around levels of INR 44, it strengthened to about INR 39 with the market forecasting further appreciation. In order to de-risk export revenues Ranbaxy took derivative positions to protect against exchange volatility. However INR movement sharply reversed to the US Dollar in June 2008 sliding past the INR 50 mark in H2 of that year. Owing to these loss making derivative positions Ranbaxy recorded foreign exchange losses of INR. 10,856.24 million in 2008. Daiichi with its global expertise should have reviewed Ranbaxys overseas investments, including derivative instruments with open positions. There must have surely been cultural differences and management style differences between the two companies and they did not get enough time to handle these issues. In an interview Atul Sobti, CEO Ranbaxy said The Japanese are very process-oriented. They have a tremendous respect for teamwork. On compliances and quality, there can be no compromises. And those are the areas that we need to work on. Culturally, those are also not our (countrys) biggest strengths. We will be sharply focussing on these issues. Daiichi also realized the need of global management structure and hence building a global management structure with clear roles and responsibilities for all locations and functions was one of the strategic agendas for them. I am also sceptical about the synergies achieved in the patented drugs space, because even after the acquisition RD expenses for Daiichi had grown from 18.6% to 21.9% of sales. Should the synergies have been achieved, with the directing of RD and manufacturing to India, COGS and RD expenses for Daiichi should have decreased or at-least remained stagnant. CONCLUSION Initially the Ranbaxy deal seemed a win-win, allowing both companies to use each others networks and technological power. The deal seemed very lucrative for Daiichi Sankyo due to the access to best FTF pipeline, access to the generics product line, access to new markets and an opportunity to diversify away from Japan into the emerging markets. However looking at the post acquisition financial statements of these companies we realize that this deal was a failure and Daiichi is trying its best to make the acquisition work in its favour. In the immediate year after the acquisition Ranbaxy reported a loss of INR 9,512.05 million and Daiichi in spite of diversifying its geographic footprint booked a loss of ÂÂ ¥215,499 million and they also made a onetime goodwill write-down of ÂÂ ¥351.3 billion for investment in Ranbaxy. These losses were mainly rooted in Ranbaxys poor performance owing to the FDA ban and bad decision in hedging currency risks. The pre-acquisition due diligence should have understood that Emerging markets are lucrative but corporate governance and integrity are surely not to be assumed in these markets. Valuations in these markets are way higher than their real potential and valuation in strongly regulated industries like pharmaceutical is strongly linked to regulations in the major markets. For the export oriented companies developed markets with stricter regulations are the main revenues streams due to higher margins; however the regulations in these markets are stricter unlike merging nations. Ranbaxy also had ease in clearing the Indian drug regulations but failed to clear the US FDA regulations and hence its US subsidiary Ohm Labs had to pitch in. Other factors such as top-management retention rates, organizational structure, internal firewalls and proper use of financial instruments to hedge risks should have been analyzed before the deal.

James Buchanan :: essays research papers

James Buchanan On April 23, 1791, a great man was born; fifteenth president of the United States, James Buchanan.He was born near Mercersburg, Pennsylvania. His father, James Buchanan, and his mother Elizabeth Speer Buchanan, raised their son a Presbyterian. He grew up in a well to do home, being the eldest of eleven other siblings. His parents cared for them all in their mansion in Pennsylvania. They sent him to Dickinson College. Buchanan graduated in 1809, was admitted to the bar in 1812, and then moved to Lancaster to set up his law practice. His political career was initiated in 1814 with his election to the Pennsylvania House of Representatives; in 1821 he began his first five elective terms in the House of Representatives. President Andrew Jackson appointed James Minister to Russia, upon his return in 1834. Buchanan was in the service of the United States Senate for a decade, and then became a secretary under James K. Polk, and as President Pierce’ s minister to Great Britain. During this Foreign Service, Buchanan’s name was mentioned as the Democratic Party’s for the 1856 Presidential Election. Buchanan had strived for this election in the three previous elections; it had seemed to pass over him. But by 1856, Buchanan was ready to retire from public service and only accepted the nomination out of duty and obligation. Buchanan didn’t actively campaign for the presidency, but instead remained quietly at home in Wheatland. Buchanan’s presidency was characterized by the state’s rights and slavery issues, which tore our country apart. Following the election of Abraham Lincoln, and by the time Buchanan left office, six states had seceded from the union. When seven of the fifteen stated seceded from the union, in 1860-1861, Buchanan did not force them to stay in the union. He felt that violence would only make more states leave. His policy delayed the Civil War until after Abraham Lincoln took office. So, therefore, Buchanan actually was president during the very beginnings of the Civil War . Being a minister to Great Britain, the Whig party regained the presidency in 1849, and Buchanan retired to Wheatland. He ran for the democratic presidential nomination. Franklin Pierce won the nomination and the election though. He appointed Buchanan minister to Great Britain. In London, Buchanan tried for two years to modify the Clayton-Bulwer treaty of 1850. This treaty provided that neither nation should occupy territory in Central America.

Reading Books Is Better Than Watching TV Essay

Books had existed on this planet thousands of years before TV was. They are both valuable and have their own advantage. However, people tend to favor books more. Books are always the number one choice for learning and researching, especially if you are studying a subject. Even though it takes time and a lot of effort to read and research a particular topic. Books are the original databases that are always trustworthy. Even advanced computer databases such as Wikipedia do not have all the required information you needed, but if they did they can sometime be false info. Furthermore, if you have a book, you could read it and re-read it all over again until you fully understand the book. However, advanced technology such as the televisions do not enabled you to do such things. Secondly, books are compact and you can take them anywhere you go. Reading books on transport is a good way to use up time and to relax. Scientist had found out that reading books actually help you to reduce stress and you will learn faster. Reading books actually does a better job than computer games when it comes to relaxing our minds. With the appearance of e-book nowadays, the advantages of book are expanding further. Nothing is more convenience than carrying hundreds of book in a portable tablet. Reading books is good, but televisions are making it easier for us to gather information by hearing. Nowadays, there is no need to read the newspapers since it takes a lot efforts and time. Instead of reading the whole newspaper, which could take a whole day, watching TV only takes half an hour. Same information, but quicker. In conclusion, reading book is better than watching TV because it can help you remember information longer. On the other hand, watching TV helps us to gather information faster than reading a book.

Term Papers about William Inge

Introduction William M. Inge was a renowned American novelist and playwright. The reputation of his Literature works has been acknowledged in the whole of America. Most of the protagonists of his works are encumbered with frustrating sexual relations. In the 1950s he produced a series of memorable productions which included, The Picnic, The Bus Stop and Come Back Little Sheba. The trio is characterized with strained relationships which are a real projection of the contemporary society. This write up therefore seeks to address the relationships between the couples in this plays and I will look into how in the 1950s how other plays got written. Also how relationships were in the 1950s to show the uncharted territory he crossed in his plays. Main Text This play, The Bus Stop, takes place 30 miles to the West of the city of Kansas inside a restaurant. The bus stop is a play involving young lovers who struggle in search of love in the contemporary society. Unlike other earlier William Inge’s works, this play does not involve a critical focus on relationships. Rather this work is considered superficial and as such many refer to it as superficial romantic comedy. This has been used by critics by asserting that it is short of in-depth relationships compared to earlier works. The play is full of sentimental characters. The icy conditions prevailing in the city of Kansas leads to the stop of inter-state bus. The passengers introduction is done one by one, each with his/her own conflicts and quirks (I. William 9; Gale). In this play, Inge lays much emphasis on the main couple; Cherie and Bo Decker. Cherie is a nightclub dancer and singer who is battling with overwhelming love of Bo Decker. On the other hand, Bo Decker is a cowboy and a ranch owner who hails from Montana. He is passionately in love with Cherie as he is no longer a virgin. The play commences at the bus stop where Grace and Elma are waiting for the bus arrival and the passengers. They are both waitresses in the restaurant where the diner will be hosted. They are discussing romance. Grace was abandoned by her husband while Elma is desperate   and single. Will, the sheriff, announces that due to snowstorm the bus and its passengers will remain in the restaurant until when normalcy resumes in the road. When the bus arrives, Cherie enters and seems scared of her fellow passenger; Bo Decker. As the bus driver, Carl and Dr. Lyman walk in, it is evident that Grace and Carl are in love. After whispering, they leave presumably for Grace’s apartment. In this play Bo believes that Cherie has fallen for him, in addition, abducted Cherie in the aim of marrying her  (I. William 29). The confrontation that involves Bo and Will reveals that Cherie is not in love with Bo as she asks protection from the sheriff. Another relationship that unfolds is that of Dr. Lyman and Elma. He starts by seducing her and makes an arrangement for them to meet at Topeka. Inge, in this play, clearly portrays a society where relationships are forced and mostly male chauvinism dominates relationships. This single diner night shows how people confront each other in order to realize their motives. The relationships are marked by outright frustration, laughs and tears. The play, Picnic, opens in the Labor Day weekend in Kansas City. It takes place in the backyards of Flo Owens and Helen Potts. Both are widowed. Flo lives with her two daughters; Millie and Madge and a spinster school teacher. On the other hand, Helen lives with ailing and elderly mother. Into this feminine atmosphere, Hal Carter, a young man, comes in. Hal’s animal vitality angers this women fraternity. He is sired of parents who neglected him and is conscious of his failings  (Gale 18). The arrangements for the town picnic are under way. During the dance music, Hal’s sexual joy projected in the dance with Madge differently affects the other characters. As Rosemary’s teacher friends are conversing about love and good times, she is aching loneliness.   This is due to her boyfriend, Howard, who has rejected her pleas for marriage. Madge is in dilemma on who to marry. This is between Alan, the rich suitor and her connection with Hal. Her mother wants her to marry the rich suitor for material wealth. Madge mother is not interested in the effect the relationship bestowed to her daughter will have but only selfishness drives her to that extent. Madge likes Hal despite the fact that she does not show her directly the passion she has for him  (I. William 85). The play portrays a society where are looking for perfect relationships. Loneliness is seen on most of the ladies in this play. For instance, Millie, the spinster teacher and Rosemary are all lonely. Flo has no husband, though not fully explained in play, she runs the house single handedly. The relationships portrayed by Inge in this play are not platonic. The relationship between Rosemary and Howard ends where she insists for marriage after sex. Madge goes ahead to have sex with Hal at the most tender age of the relationship. The relationship between Madge and Alan is based on riches. Owing to the fact that Madge has only the elementary high school education and she is only a store attendant, leads to the mothers’ choice of the rich suitor. She even terms Madge as the only asset she has in trade. Helen and Flo are portrayed as women without husbands. Though not explained fully in the play, it leaves the audience with many questions on the genuineness of these relationships. To many, this is an indication that,  Ã‚   their husbands left after the burden of house chores and family maintenance became unbearable. It may also be interpreted to mean that, they left after the love became sour. In this play, Come Back Little Sheba, Inge focuses on the most controversial issues affecting the society. It extensively analyzes sexuality and pregnancy in the society more so out of the wedlock. This play opens in Delaney’s kitchen where Doc is preparing breakfast. Marie who stays with Doc wakes up early in order to study for the exam in hand. The two starts conversing on how Doc changed his profession from a doctor to a biologist after the third year of studies  (Frank 45). Lola, Doc’s wife, thinks that Bruce, Marie’s boyfriend, on arrival must see a clean house as such she spends time cleaning the house. She goes on to purchase curtains and takes lilac for the tables’ centerpiece from Mrs. Coffman.Doc suspects that there is a relationship between Marie and Turk. This is revealed when he inquires from her wife if there was a man in the house the previous night  (That New Magazine, Inc 53). Lola is unaware that Turk slept in her house with Marie; it comes to the open when Turk sneaks from Marie’s room only to run into Doc. On arrival, Bruce, prefers taking cocktail in a restaurant. This is aimed at securing privacy with Marie and leaving Lola in the House. Relationship between Lola and Doc is full of problems. Doc comes home late and drunk and even sometimes does not come home. Lola met Doc when he was a medical student in the college. She ends up getting pregnant thus giving rise a child born out of wedlock. This is what Doc claims led to their marriage and spoiling his ambition in the medical field. It also led to his drinking spree and considers himself totally wasted by the relationship. He insists that he was forced to marry and goes on to insult her as slut. This relationship, like other relationships in this play, is characterized by sex out of the wedlock and frustrations. Alcohol has taken a center stage in many relationships in this play. Many a times, Doc is overwhelmed by his alcoholic nature to the extent of forgetting his relationship with Lola. This has a negative impact on the welfare of the family. In one instance, Doc under the influence of alcohol chases Lola threatening to chop her up. As such alcohol is a major threat to relationships. Turk and Marie are students in the same college and in a relationship. Doc is aware of this and recognizes that Turk is an opportunist and does not respect Marie. His doubt is affirmed when one evening as he was moving from the kitchen overhears the voice of Turk in Marie’s room. Feeling protective and incensed Doc wishes that he had an opportunity to throw Turk out of Marie’s room. This angers him and almost falls to the temptation of drinking as he considers this as a solution to relationship problems  (Jeff 78). Doc is concerned about this relationship as it reminds him of the memories of his relationship when he was a young student in medicine. He is afraid that Marie and Turk might repeat the same mistakes. Bruce and Marie are in an intimate relationship. Though not critically focused, it is evident that the two are in a close relationship and Lola is in dire support of the two. Lola goes on to ensure that Bruce is comfortable with Marie when he comes and prepares the foodstuffs in advance and also makes the house to be spotlessly clean. Bruce wants a private life with Marie and therefore prefers to have diner in a restaurant rather than in Lola’s place. The relationship between Lola and Marie is evident from the perspective of their interaction. Despite Marie being an outsider, a college student who shares the same apartment with her, she is hospitable to her. She offers to have the same cooking arrangements with her. Their relationship is strong and Lola goes on to make Marie’s boyfriend, Bruce, comfortable. Lola is stressed by the way is husband is behaving and seeks refuge emotionally in Marie. The husband is usually violent and aggressive and suggests that she (Lola) is the cause of his marital unhappiness  (Londrà © 41). The other relationship depicted in this play is the one between Lola and Little Sheba. Lola had a graving love for the dog which had got lost for many years. She believes that one day the Little Sheba will avail itself and be able to tame it. In some instances, Lola dreams about the Little Sheba. She occasionally has nightmares about its whereabouts and his husband is far much fascinated by such passion towards animal. Generally, in this play women seem to be the one deciding on the various issues concerning the family relationship. We see that they are the ones who start the relationship e.g. the case of Lola and Doc and also they can terminate the relationship as in the case of Marie and Turk. Conclusion The works of Williams Inge are a clear reflection of the relationships that take place in the contemporary society. Inge in his satirical focus on the society has extensively explored relationships. In his works most of the relationships are strained and sex before wedlock is prevalent. In other cases, drinking has been seen as solution to the problems that exist in relationships.   Though Inge writes for the 1950s, his definition of the ideal societal relationship is not up to date achieved. Many relationships today depict the features of those explained by Inge in the 1950s. Annotated bibliography Frank, Northen. Survey of Contemporary Literature. Michigan: salem, 2003. Franks book is a collection of literary works of great authors in the contemporary society. It among others includes the play of William Inge The Bus Stop. It gives a review of how this book relates to the contemporary society. Frank in this book observes that, The Bus Stop is a comedy on Relationships that focuses on the relationships of the current society. He offers clear picture of the relationships of the present society and offer advice to those in the current society who are affected by relationships Gale, Thompson. Book Rags. November 2005. 12 December 2010 http://www.bookrags.com/studyguide-picnic/. Thompson in this website gives an overview and a guide towards understanding the book Picnic. He successfully does this by giving a brief plot of the book and finally details on themes and characters in this play. Thompson observes in his analysis of the themes that, the feminine atmosphere in Kansas city is not only lonely but also frustrated in relationships. Jeff, Johnson. William Inge and the subversion of gender: rewriting stereotypes in the plays, novels, and screenplays. Califonia: McFarland, 2004. Johnson observes that William Inge found early success   as a winner of an award for Drama. In this book he observes the literary works of William Inge and the major themes surrounding it. A close study of the work of Inge observes that his major study was on Gendermandering, the gender roles in relationships in the society which Inge fully exploits for dramatic and help in subverting the expectations of the society. Primarily Johnson observes that the text is giving full emphasis on gender and relationships. Londrà ©, Hardison Felicia. Words at play: creative writing and dramaturgy. New York: SIU Press, 2005. Londre in his book words at play analyses drama from the works of literature icons in this field.   Focus is much given on the works of William Inge. Londre praises the works of William Inge especially in bringing out one of the burning issues that the society is scared of confronting but slowly engulfing silently: relationships. William, Inge. Bus stop. New York: Random house, 1955. This is the original text from the author: William Inge It is a comical play on relationships at the restaurant during diner. The major relationship in focus is that of Cherie and the Cowboy from Montana. William, Inge. 4 plays: Come back, Little Sheba; Picnic; Bus stop; The dark at the top of the stairs. New York: Random House, 1958. These are the original texts of the plays that William Inge authored. William Inge in this plays gives a definition of relationships in the 1950s which is also relevant in the present day societies. Works Cited Frank, Northen. Survey of Contemporary Literature. Michigan: salem, 2003. Gale, Thompson. Book Rags. November 2005. 12 December 2010 http://www.bookrags.com/studyguide-picnic/. Jeff, Johnson. William Inge and the subversion of gender: rewriting stereotypes in the plays, novels, and screenplays. Califonia: McFarland, 2004. Londrà ©, Hardison Felicia. Words at play: creative writing and dramaturgy. New York: SIU Press, 2005. William, Ine. Bus stop. New York: Random house, 1955. William, Inge. 4 plays: Come back, Little Sheba; Picnic; Bus stop; The dark at the top of the stairs. New York: Random House, 1958.