Comprehensive M&A data with integrated detailed company information

Shire agrees USD 2.4bn sale of oncology business as it makes room for Takeda takeover
Posted on Monday, 16 April 2018 13:53
UK-based Shire has agreed to offload its oncology business to France’s Servier for USD 2.40 billion amid talks Takeda is planning to submit a GBP 35.00 billion bid for the company.

The group’s cancer therapy operations includes in-market products such as Oncaspar, a component of multi-agent treatment for acute lymphoblastic leukemia, as well as rights to multi-agent treatment for metastatic pancreatic cancer post gemcitabine-based therapy Onivyde.

In addition, Servier will gain access to Calaspargase Pegol (Cal-PEG), which is under Food and Drug Administration review for the treatment of all and early stage immuno-oncology pipeline collaborations.

The French drug maker is paying 9.2x the oncology business’ 2017 revenues of USD 262.00 million and will pay cash for the operations.

Closing is slated for the second or third quarter of 2018 and does not require shareholder approvals, with the board already giving the green light to the deal.

Olivier Laureau, president of the buyer, noted: “The acquisition of Shire's oncology franchise enables Servier to meet its strategic ambitions to become a global key player in oncology.”

Flemming Ornskov, chief executive of the vendor, added: “This transaction is a key milestone for Shire, demonstrating the clear value embedded in our portfolio. While the Oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire’s longer-term strategy.

“We will continue to evaluate our portfolio for opportunities to unlock further value and sharpen our focus on rare disease leadership with selective disposals of non-strategic assets.”

She also added that proceeds will help increase optionality and the board is considering returning the cash raised to shareholders through a buyback after the current offer period regarding Takeda’s possible offer for Shire concludes.

That being said, headlines in recent weeks have suggested the Japanese drug giant is preparing a GBP 35.00 billion offer for the UK-based rare disease company with its chief executive expected to fly to the US to discuss such a deal with investors this week.

However, analysts have had concerns, a report by the Telegraph suggested, adding Takeda may struggle to fund such a transaction, as it is worth GBP 7.00 billion less than Shire.

Under UK takeover rules, the potential suitor has until 25th April to announce whether or not it will bid for Shire.

© Zephus Ltd