Shire shares rock­et up af­ter Take­da says it's pon­der­ing a takeover bid

Take­da said ear­ly Wednes­day that it is con­sid­er­ing mak­ing an of­fer to buy Shire $SH­PG, and it has a clear­ly thought out a set of rea­sons why.

As of now, Take­da said in a state­ment that it has made no for­mal of­fer for Shire, but is ex­plor­ing the pos­si­bil­i­ty. That’s ex­act­ly in line with takeover rules to sat­is­fy UK reg­u­la­tors. And Shire’s shares im­me­di­ate­ly blast­ed up­ward, jump­ing 17%. The com­pa­ny start­ed the day with a mar­ket cap of $38 bil­lion.

Christophe We­ber

For Take­da CEO Christophe We­ber, a Shire ac­qui­si­tion would dri­ve a big ex­pan­sion in the Boston area, where the Japan­ese com­pa­ny has been con­cen­trat­ing much of its R&D op­er­a­tions. R&D chief Andy Plump is based in the Boston area, and Shire has been ready­ing new fa­cil­i­ties for it­self in Cam­bridge, near its main in­ter­na­tion­al head­quar­ters in Lex­ing­ton, MA.

A buy­out would al­so come af­ter Take­da had shak­en up its R&D struc­ture glob­al­ly, cut­ting back on staff while do­ing more deals with part­ners like De­nali.

In a state­ment out this morn­ing, Take­da spelled out why it’s prep­ping a bid. A deal, the com­pa­ny said, would:

  • strength­en Take­da’s core ther­a­peu­tic ar­eas of on­col­o­gy, GI and neu­ro­science
  • ac­cel­er­ate Take­da’s vi­sion to be a leader in spe­cial­ized med­i­cines that are trans­for­ma­tive to pa­tients through the ad­di­tion of Shire’s lead­ing glob­al rare dis­ease fran­chise
  • fur­ther en­hance Take­da’s ro­bust R&D strat­e­gy, con­cen­trat­ing on key ther­a­peu­tic ar­eas
  • re­in­force a strong and large-mol­e­cule fo­cused late-stage pipeline with­in Take­da’s core ther­a­peu­tic ar­eas to com­ple­ment Take­da’s own pipeline and dis­cov­ery ca­pa­bil­i­ties
  • bal­ance Take­da’s ge­o­graph­ic fo­cus to align with the mar­ket op­por­tu­ni­ty in the US
  • dri­ve fi­nan­cial val­ue from a strong com­bined fi­nan­cial pro­file
Flem­ming Orn­skov

Shire is still in the midst of a com­plete makeover of its own en­gi­neered by CEO Flem­ming Orn­skov, who has steered the com­pa­ny in­to the rare dis­ease busi­ness while con­sid­er­ing op­tions for pos­si­bly spin­ning out its AD­HD di­vi­sion. Orn­skov lined up  the $32 bil­lion buy­out of Bax­al­ta, but an­a­lysts have been skep­ti­cal about Shire’s fu­ture in light of the big changes it faces as Roche rolls out Hem­li­bra, grab­bing mar­ket share in the he­mo­phil­ia mar­ket.

Shire has fre­quent­ly been raised as a po­ten­tial takeover tar­get, and came close to merg­ing in­to Ab­b­Vie four years ago. That deal fell through with the in­tro­duc­tion of new rules mak­ing cap­i­tal in­ver­sions dif­fi­cult, pre­vent­ing the tax ben­e­fits Ab­b­Vie sought in buy­ing a com­pa­ny which is of­fi­cial­ly based in Ire­land. But the com­pa­ny re­mained a fre­quent­ly cit­ed takeover tar­get, most re­cent­ly at the end of last year, with an­a­lysts won­der­ing if Pfiz­er would make a move.

Now you can ex­pect plen­ty of spec­u­la­tion to fol­low, as an­a­lysts won­der aloud whether Pfiz­er and oth­er po­ten­tial bid­ders will step up to make this an auc­tion.

By the rule book, Take­da now has un­til 5 pm (Lon­don time) on April 25th to make a bid.

Not every­one would con­clude that a buy­out is a good idea.

“While it is im­pos­si­ble to say nev­er on M&A, Shire does not strike us as an ob­vi­ous takeover can­di­date,” said UBS at the time, ac­cord­ing to a re­port from the Fi­nan­cial Times. “Shire’s spe­cial­ty fo­cus and mix of ther­a­peu­tic fo­ci means that most buy­ers would strug­gle to ex­tract sub­stan­tial op­er­a­tional syn­er­gies while es­cap­ing from com­pe­ti­tion prob­lems, in our view. Shire is based in Ire­land, which means a very low cor­po­rate tax rate, which would most prob­a­bly rise in most sce­nar­ios were the com­pa­ny ac­quired. It would al­so be a bold ac­qui­si­tion in our view giv­en the un­cer­tain tra­jec­to­ry of Shire’s haemophil­ia busi­ness.”

 

The top 10 block­buster drugs in the late-stage pipeline — Eval­u­ate adds 6 new ther­a­pies to heavy-hit­ter list

Vertex comes in for a substantial amount of criticism for its no-holds-barred tactical approach toward wresting the price it wants for its commercial drugs in Europe. But the flip side of that coin is a highly admired R&D and commercial operation that regularly wins kudos from analysts for their ability to engineer greater cash flow from the breakthrough drugs they create.

Both aspects needed for success in this business are on display in the program backing Vertex’s triple for cystic fibrosis. VX-659/VX-445 + Tezacaftor + Ivacaftor — it’s been whittled down to 445 now — was singled out by Evaluate Pharma as the late-stage therapy most likely to win the crown for drug sales in 5 years, with a projected peak revenue forecast of $4.3 billion.

The latest annual list, which you can see here in their latest world preview, includes a roster of some of the most closely watched development programs in biopharma. And Evaluate has added 6 must-watch experimental drugs to the top 10 as drugs fail or go on to a first approval. With apologies to the list maker, I revamped this to rank the top 10 by projected 2024 sales, instead of Evaluate's net present value rankings.

It's how we roll at Endpoints News.

Here is a quick summary of the rest of the top 10:

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John Chiminski, Catalent CEO - File Photo

'It's a growth play': Catal­ent ac­quires Bris­tol-My­er­s' Eu­ro­pean launch pad, ex­pand­ing glob­al CD­MO ops

Catalent is staying on the growth track.

Just two months after committing $1.2 billion to pick up Paragon and take a deep dive into the sizzling hot gene therapy manufacturing sector, the CDMO is bouncing right back with a deal to buy out Bristol-Myers’ central launchpad for new therapies in Europe, acquiring a complex in Anagni, Italy, southwest of Rome, that will significantly expand its capacity on the continent.

There are no terms being offered, but this is no small deal. The Anagni campus employs some 700 staffers, and Catalent is planning to go right in — once the deal closes late this year — with a blueprint to build up the operations further as they expand on oral solid, biologics, and sterile product manufacturing and packaging.

This is an uncommon deal, Catalent CEO John Chiminski tells me. But it offers a shortcut for rapid growth that cuts years out of developing a green fields project. That’s time Catalent doesn’t have as the industry undergoes unprecedented expansion around the world.

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How small- to mid-sized biotechs can adopt pa­tient cen­tric­i­ty in their on­col­o­gy tri­als

By Lucy Clos­sick Thom­son, Se­nior Di­rec­tor of On­col­o­gy Pro­ject Man­age­ment, Icon

Clin­i­cal tri­als in on­col­o­gy can be cost­ly and chal­leng­ing to man­age. One fac­tor that could re­duce costs and re­duce bar­ri­ers is har­ness­ing the pa­tient voice in tri­al de­sign to help ac­cel­er­ate pa­tient en­roll­ment. Now is the time to adopt pa­tient-cen­tric strate­gies that not on­ly fo­cus on pa­tient needs, but al­so can main­tain cost ef­fi­cien­cy.

John Reed at JPM 2019. Jeff Rumans for Endpoints News

Sanofi's John Reed con­tin­ues to re­or­ga­nize R&D, cut­ting 466 jobs while boost­ing can­cer, gene ther­a­py re­search

The R&D reorganization inside Sanofi is continuing, more than a year after the pharma giant brought in John Reed to head the research arm of the Paris-based company.
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Gilead baits new al­liance with $45M up­front, div­ing in­to the busy pro­tein degra­da­tion field

Gilead is jump­ing on board the pro­tein degra­da­tion band­wag­on. And they’re turn­ing to a low-pro­file Third Rock start­up for the ex­per­tise. But if you were look­ing for a trans­for­ma­tion­al deal to kick up fresh en­thu­si­asm for Gilead, you’ll have to re­main pa­tient.

This one will have a long way to go be­fore they get in­to the clin­ic.

The big biotech said Wednes­day morn­ing that it is pay­ing $45 mil­lion up­front and re­serv­ing a whop­ping $2.3 bil­lion in biotech bucks if San Fran­cis­co-based Nurix can point the way to new can­cer ther­a­pies, as well as drugs for oth­er, un­spec­i­fied dis­eases.

In­vestor day prep at Mer­ck in­cludes a new strat­e­gy to pick up the pace on M&A — re­port

Mer­ck’s re­cent deals to buy up two bolt-on biotechs — Ti­los and Pelo­ton — weren’t an aber­ra­tion. In­stead, both ac­qui­si­tions mark a new strat­e­gy to beef up its dom­i­nant can­cer drug op­er­a­tions cen­tered on Keytru­da while look­ing to ad­dress grow­ing con­cerns that too many of its eggs are in the one I/O bas­ket for their PD-1 pro­gram. And Mer­ck is go­ing af­ter more small- and mid-sized buy­outs to calm those fears.

Sanofi aligns it­self with Google to stream­line drug de­vel­op­ment

Tech­nol­o­gy is bleed­ing in­to health­care, and big phar­ma is rid­ing the wave. Sanofi $SNY ap­point­ed its first chief dig­i­tal of­fi­cer this Feb­ru­ary, fol­low­ing the foot­steps of its peers. By May, the French drug­mak­er and some of its big phar­ma com­pa­tri­ots joined forces with Google par­ent Al­pha­bet’s Ver­i­ly unit to aug­ment clin­i­cal tri­al re­search. On Tues­day, the Parisian com­pa­ny tied up with Google to ac­cess its cloud com­put­ing and ar­ti­fi­cial in­tel­li­gence tech to spur the de­vel­op­ment of new ther­a­pies.

Arc­turus ex­pands col­lab­o­ra­tion, adding $30M cash; Ku­ra shoots for $100M raise

→  Rare dis­ease play­er Ul­tragenyx $RARE is ex­pand­ing its al­liance with Arc­turus $ARCT, pay­ing $24 mil­lion for eq­ui­ty and an­oth­er $6 mil­lion in an up­front as the two part­ners ex­pand their col­lab­o­ra­tion to in­clude up to 12 tar­gets. “This ex­pand­ed col­lab­o­ra­tion fur­ther so­lid­i­fies our mR­NA plat­form by adding ad­di­tion­al tar­gets and ex­pand­ing our abil­i­ty to po­ten­tial­ly treat more dis­eases,” said Emil Kakkis, the CEO at Ul­tragenyx. “We are pleased with the progress of our on­go­ing col­lab­o­ra­tion. Our most ad­vanced mR­NA pro­gram, UX053 for the treat­ment of Glyco­gen Stor­age Dis­ease Type III, is ex­pect­ed to move in­to the clin­ic next year, and we look for­ward to fur­ther build­ing up­on the ini­tial suc­cess of this part­ner­ship.”

UP­DAT­ED: Chica­go biotech ar­gues blue­bird, Third Rock 'killed' its ri­val, pi­o­neer­ing tha­lassemia gene ther­a­py in law­suit

Blue­bird bio $BLUE chief Nick Leschly court­ed con­tro­ver­sy last week when he re­vealed the com­pa­ny’s be­ta tha­lassemia treat­ment will car­ry a jaw-drop­ping $1.8 mil­lion price tag over a 5-year pe­ri­od in Eu­rope — mak­ing it the plan­et’s sec­ond most ex­pen­sive ther­a­py be­hind No­var­tis’ $NVS fresh­ly ap­proved spinal mus­cu­lar at­ro­phy ther­a­py, Zol­gens­ma, at $2.1 mil­lion. A Chica­go biotech, mean­while, has been fum­ing at the side­lines. In a law­suit filed ear­li­er this month, Er­rant Gene Ther­a­peu­tics al­leged that blue­bird and ven­ture cap­i­tal group Third Rock un­law­ful­ly prised a vi­ral vec­tor, de­vel­oped in part­ner­ship with the Memo­r­i­al Sloan Ket­ter­ing Can­cer Cen­ter (MSK), from its grasp, and thwart­ed the de­vel­op­ment of its sem­i­nal gene ther­a­py.