Shire offloads oncology business to French firm for 2.4 billion USA dollars

Cornelia Mascio
Aprile 16, 2018

As of 09:32 BST, Shire's share price had added 0.65 percent to 3,630.00p.

The oncology unit was an area that Takeda had identified as a driver for its potential takeover approach.

Still, given the small contribution of the cancer business to Shire's overall profits, Deutsche Bank analysts said this was unlikely to be a deal breaker.

A Takeda spokesman declined to comment.

The firm, which has its headquarters in Dublin, started looking at offloading the oncology business in December, and said the process considered "multiple potential strategic buyers" across Europe, Japan and the US. Takeda's interest in Shire was made public only at the end of last month. A decision on whether the firm will make a bid or not is required by April 25 as per United Kingdom regulation.

Buying Shire would be transformational for Takeda but would be a huge financial stretch, since the company is worth around $10 billion more than the Japanese group.

The drugs industry has seen a surge in deal-making this year as large players look for promising assets to improve their pipelines, but a Takeda-Shire transaction would be by far the biggest yet.

Ornskov also noted the Board will consider returning the proceeds of the sale to shareholders through a shareholder-approved share buyback, after the current offer period regarding Takeda's possible offer for Shire comes to an end.

"While the oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire's longer-term strategy".

Shire has always been seen as a likely takeover target and was almost bought by US drugmaker AbbVie in 2014, until USA tax rule changes caused it to walk away.

Its oncology business had sales of $262 million previous year, putting the divestment on a respectable revenue multiple of 9.2 times.

But Monday's news that Shire has sold off its cancer treatment unit - which includes its ONCASPAR (leukaemia) and ONIVYDE (pancreas) treatments - has thrown that possible takeover into doubt. The portfolio also includes Calaspargase Pegol (Cal-PEG), which is under FDA review for the treatment of ALL, and early stage immuno-oncology pipeline collaborations.

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