Shire and Takeda Achieve Merger

Roller Coaster Ride

Japan-based drugmaker Takeda tentatively agreed to buy Ireland-based rare disease biopharma company Shire for 46 billion pounds ($64 billion) in one of the largest pharma deals to date, Reuters reported. According to the story, “Takeda has offered the equivalent of 49 pounds in cash and stock for each share of Shire, almost 25 percent more than Tuesday's closing price. Shire Plc said Wednesday that it is prepared to recommend the deal to shareholders, pending agreement on other terms.”

Selina McKee of Pharma Times said that Shire shareholders would own around 50 percent of the new group. As she explained, “Shire noted that the making of any firm offer by Takeda would be subject to agreement of certain other terms of the latest proposal, completion of a due diligence review by Takeda, the unanimous recommendation of the Board of Shire, and final approval by the Japanese drugmaker.”

This was the fifth proposal in Takeda’s bid for Shire. Rumors had been affecting stock prices. Early in April, Reuters reported that Takeda had an approach to acquire Shire. Days later Shire announced that it had rejected three Takeda bids. The first bid valued the business at 41 billion pounds (28 pounds per Shire shares paid in Takeda shares plus 16 pounds per share in cash), the second 43 billion pounds (28.75 pounds per Shire shares paid in Takeda shares plus 16.75 pounds per share in cash) and the third 44 billion pounds (28 pounds per Shire shares paid in Takeda shares plus 17.75 pounds per share in cash). Reuters also reported interest from Allergan, which ruled itself out a day later.

Then Takeda increased its offer with a fourth bid, to 26 pounds per Shire shares paid in Takeda shares plus 21 pounds per share in cash, providing a total value of 44.3 billion pounds ($62.1 billion). On April 24, Takeda submitted an enhanced fifth bid for the company, and Shire recommended the revised 45.8 billion pound ($64 billion) offer to its shareholders. The enhanced offer included a more generous cash component, with 21.76 pounds ($30.33) in cash for each Shire ordinary share. GlaxoSmithKline ruled out making any form of counter-bid.

Takeda, a global pharmaceutical company has a 235-year history. It is the largest pharmaceutical company in Asia and a top 15 pharmaceutical company in the world. Takeda’s key therapeutic areas are oncology, gastroenterology (GI) and central nervous system (CNS) diseases. In 1977, Takeda entered the U.S. pharmaceutical market in a joint venture with Abbott Laboratories called TAP Pharmaceuticals. The company introduced the blockbusters Lupron (leuprolide) in 1985 and Prevacid (lansoprazole) in 1995. One of Takeda’s mainstay drugs is Actos, a thiazolidinedione compound used to treat type 2 diabetes, launched in 1999.

Shire, which was founded more than 30 years ago, focuses on underserved patient communities with therapeutics for rare diseases. The company's products, which are available in more than 100 countries, include therapeutic areas such as hematology, immunology, neuroscience, lysosomal storage disorders, gastrointestinal/internal medicine/endocrine and hereditary angioedema and oncology. The company has emerging pipeline in ophthalmics.