Servier buys Shire’s oncology unit for $2.4B in the run-up to Takeda’s final buyout offer — if it makes one

If Takeda comes knocking on Shire’s door for what would be the largest acquisition in 2018, it won’t get the whole package it was angling for.

Shire announced it’s selling its oncology business to French immuno-oncology company Servier for $2.4 billion. The deal comes after Takeda expressed interest for a complete takeover, wooed analysts for support and reportedly sought loans to fund the effort — and just days ahead of the April 25 deadline for the Japanese drugmaker to make a bid.

Takeda clearly stated that strengthening its core therapeutic area of oncology (alongside gastrointestinal and neuroscience) was a key reason it wanted to gobble up Shire. The Irish-headquartered pharma, which has increasingly turned its focus to rare disease in recent years, had rights to chemotherapy agent Oncaspar and pancreatic cancer treatment Onivyde, both of which are on the market. Another leukemia therapy, Calaspargase Pegol, is currently under review. Those and all other early-stage immuno-oncology pipeline collaborations will now go to Servier.

Shire CEO Flemming Ornskov

“While the oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire’s longer-term strategy,” said CEO Flemming Ornskov, the key narrator in Shire’s makeover story, in a statement. “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.”

The proceeds from the transaction, which is expected to close in this or next quarter, would “increase optionality.” They might be returned to shareholders in the form of a share buyback, Shire says, when the Takeda offer period is over.

For Servier, the new assets offer an immediate commercial presence in the US. In 2017, the oncology business generated $262 million in revenue.

According to the company, its board of directors began scouting divestments for the oncology business in December 2017, identifying “multiple potential strategic buyers across the US, Europe and Japan” a month later.

Shire’s stock $SHPG rose 2% in pre-market trading, going at $155.9 per share.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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