On second thought, Allergan doesn't want to consider a bid for Shire, leaving Takeda in sole pursuit of $62.5B deal
The biotech put out a statement Thursday afternoon in an abrupt about-face — after watching its shares drop 7% — saying that it “does not intend to make an offer for Shire.” The company added:
Allergan $AGN continues its ongoing process of evaluating a full range of potential strategic actions that will create value for shareholders, such as divestitures, combinations and acquisitions.
Analysts quickly signaled their skepticism for a merger driven by Allergan, focusing on Shire’s growing weakness in the face of an erosion of the Vyvanse franchise and some stiff new competition on the hemophilia front from Roche’s Hemlibra.
Leerink’s Etzer Darout noted:
In our view, a combination with SHPG introduces some growth challenges in out-years, which are reflected in the negative stock reaction as well also as consensus sales estimates for SHPG with 2019-22E revenue CAGR of +4% but 2019-24E CAGR of -1%, which assumes erosion of Vyvanse starting in 2023E and significant erosion of SHPG’s hemophilia business with entry of novel approaches including Roche’s (NR) Hemlibra (hemophilia A).
So we’re back to seeing only Takeda at the table with a $62.5 billion offer that it’s also having trouble pitching to analysts. A bidding war now will have to wait the arrival of a new player, which may yet happen.
In a side note on Thursday, Evercore ISIS’s Umer Raffat sent out word that his firm is suspending coverage of Allergan because of the role they were playing advising Takeda. Of course, at this point, they may want to do a change-up there as well. Allergan is the last company now that will want to make a bid for Shire.