Shire to Sell Oncology Business to Servier for $2.4 Billion

Lloyd Doyle
April 16, 2018

Shire has agreed to sell its cancer drugs business to French drugmaker Servier for $2.4bn, even as it prepared for a possible takeover offer from Takeda.

Explaining the move, Shire CEO Flemming Ornskov said that "while the oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire's longer-term strategy", which lies mainly in rare diseases. Buying Shire would be transformational for Takeda but would be a huge financial stretch, since the company is now worth around $10 billion more than the Japanese group.

Ornskov said the board will consider returning the proceeds of the sale back to shareholders through a buyback programme. Under UK takeover rules, Takeda has until April 25th to announce whether or not it will bid for Shire, which has a market value of around $47 billion. A Takeda spokesman declined to comment.

It said last month that a potential transaction with Shire presented an opportunity to create a "truly global, value-based Japanese biopharmaceutical leader", strengthening its core oncology, gastrointestinal and neuroscience offerings.

Shire gained as much as 3.5 percent to 3,732 pence in early trading in London.

If a deal were to be struck, it would see the hunter become the hunted after Shire itself went on the acquisition trail only two years ago when it bought Baxalta for 32 billion U.S. dollars (£22.6 billion). Oncology is therefore a small part of Shire's business, but was highlighted by Takeda as one of three therapeutic categories that could be bolstered by merging the two companies.

The Oncology business consists of in-market products ONCASPAR, or pegaspargase, a component of multi-agent treatment for acute lymphoblastic leukaemia and ex-US rights to ONIVYDE, a component for the treatment of metastatic pancreatic cancer.

For privately held Servier, acquiring Shire's oncology operation allows it to establish a direct commercial presence in the United States and boosts its presence in cancer. The portfolio also includes Calaspargase Pegol, which is current under review by the US Food and Drug Administration.

Other reports by Iphone Fresh

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