On April 16, Dublin-based pharmaceutical and biotechnology company Shire announced it was selling its oncology business to unlisted French company Servier – presenting a potential roadblock to Takeda Pharmaceutical’s bid to buy Shire.
The deal, which Servier hopes will put it on the map as a global player in the oncology space, will net Shire $2.4bn in cash. Shire’s willingness to part with its cancer-treatment unit, which generated $262m in revenue in 2017, demonstrates the company’s confidence in its core business competences, despite its stock price never having surpassed its 2015 peak.
“This transaction is a key milestone for Shire, demonstrating the clear value embedded in our portfolio,” said Shire CEO Flemming Ornskov.
Shire’s sale of its cancer-treatment business could affect Takeda’s valuation of the company – if not its willingness to follow through with the purchase
“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.”
However, the deal complicates Takeda’s bid to take over the Dublin-based company. When Takeda confirmed it was considering acquiring Shire at the end of March, it listed oncology, along with gastroenterology and neuroscience, as one of the core therapeutic areas that made the purchase attractive. Naturally, Shire’s sale of this part of its business could affect Takeda’s valuation of the company – if not its willingness to follow through with the purchase.
The sale also means Servier will have a stronger presence in the US market with drugs that treat various forms of cancer, including acute lymphoblastic leukaemia and metastatic pancreatic cancer.
Regulators have given Takeda a deadline of April 25th to decide whether to make a formal offer for Shire, but doubts remain as to whether Takeda can afford the purchase, with Shire currently worth over £7bn ($10bn) more than the Japanese company.