Take­da CEO Christophe We­ber fi­nal­ly clos­es on his $62B deal to buy Shire — now he has to con­vince share­hold­ers and slash jobs

Take­da CEO Christophe We­ber has fi­nal­ly closed his $62 bil­lion deal to buy out Shire. Now comes an even hard­er part.

The two com­pa­nies an­nounced the pact overnight, with Shire’s board ac­cept­ing We­ber’s of­fer of £49 a share, which val­ues the com­pa­ny at £46 bil­lion. Now he’ll have to sell it to share­hold­ers — which is not a giv­en af­ter Take­da saw its mar­ket cap plunge more than 20% dur­ing the talks.

Flem­ming Orn­skov

If he gets past that hur­dle We­ber will then need to knit to­geth­er a new top 10 — by sales — glob­al phar­ma com­pa­ny while carv­ing out $1.4 bil­lion in cost syn­er­gies. About $600 mil­lion will come out of two R&D or­ga­ni­za­tions that have al­ready been through sev­er­al cy­cles of re­struc­tur­ing. Slight­ly more than half will come from sales and ad­min­is­tra­tion.

That means job cuts.

Drill down in­to the fine print of the deal, and you’ll find that the top ex­ecs at Take­da will ax 6% to 7% of the com­bined work­force. About a third of that will come out of R&D, with the bulk of the cuts be­ing made to sales and ad­min­is­tra­tion. With about 30,000 staffers at Take­da and 22,000 at Shire, a 7% cut would cost the jobs of about 3,640 peo­ple.

The new Take­da that emerges will be based in Tokyo with ex­pand­ed op­er­a­tions in the Cam­bridge/Boston area, which will con­tain the bulk of its R&D group. The Japan­ese com­pa­ny says it will then start a re­view of fa­cil­i­ties, to see which Shire labs and of­fices will stay and which will go. Man­u­fac­tur­ing ops will al­so be in­te­grat­ed.

The new com­pa­ny will be left with re­gion­al groups in Japan, Sin­ga­pore, Switzer­land and the US. But Shire’s of­fi­cial head­quar­ters in Dublin, which will no longer be need­ed, may well face the ax.

The merg­er of these two com­pa­nies, with the small­er Take­da cap­tur­ing the larg­er prey, gives We­ber the glob­al trans­for­ma­tion he was asked to de­liv­er. But it al­so has raised se­ri­ous ques­tions about the longterm vi­a­bil­i­ty of the Shire or­ga­ni­za­tion he’s buy­ing, which has an ag­ing fran­chise in AD­HD and a ma­jor new threat to its he­mo­phil­ia op­er­a­tions from Roche’s Hem­li­bra. 

Un­der CEO Flem­ming Orn­skov, Shire bought out Bax­al­ta for $32 bil­lion, and has been com­bin­ing its drugs in­to a pipeline heav­i­ly fo­cused on rare dis­eases, giv­ing Take­da what it likes to call a com­ple­men­tary or­ga­ni­za­tion to its own con­cen­tra­tion on on­col­o­gy, gas­troen­terol­o­gy and cen­tral ner­vous sys­tem ther­a­peu­tic ar­eas plus vac­cines.

Thomas Dit­trich

Take­da al­so set aside $9.1 mil­lion for re­ten­tion bonus­es to keep the ser­vices of some key per­son­nel, which will dou­ble the pay and bonus­es due to CEO Orn­skov and CFO Thomas Dit­trich.

JP Mor­gan Chase Bank, Sum­it­o­mo Mit­sui Bank­ing Cor­po­ra­tion and MUFG Bank have put to­geth­er a $31 bil­lion bridge loan to com­plete the cash por­tion of the deal, which will lat­er be re­struc­tured in­to a longterm loan as Take­da tries to con­vince the cred­it rat­ing groups to show some mer­cy on its rat­ings.


Im­age: Christophe We­ber. GET­TY IM­AGES

From left to right: Lilian Kim, Associate Director Business Development; John Moller, CEO; Yooni Kim, Executive Director, Asia Operations; Michelle Park, Director South Korea Operations.

Novotech CRO sees 26% growth in Asia tri­al ac­tiv­i­ty from biotechs, but still plen­ty of ca­pac­i­ty

As the Asia-Pacific clinical trials sector continues to grow rapidly, Novotech the Asia-Pacific-based CRO is seeing biotech clinical activity up by 26%. But says there is still plenty of capacity in the region that features advanced medical facilities, supportive regulatory environments, and more than 2.3 billion people, largely treatment naïve, living in urban areas.

China, South Korea and Australia have the most studies registered as recruiting or about to recruit according to ClinicalTrials.Gov.

US mulls tar­iffs on Swiss drug ex­ports, weigh­ing on No­var­tis and Roche –  re­port

The leading Swiss newspaper has reported that the US is considering placing tariffs on pharmaceuticals from Switzerland. Roche and Novartis stock each fell 1% after the news broke.

Neue Zürcher Zeitung reported that US Trade Representative Robert Lighthizer told pharmaceutical representatives the Trump administration was considering the move. Tariffs do not appear to be in the immediate offing, but they would potentially affect Swiss giants Novartis and Roche along with other companies that manufacture in Switzerland, including Merck KGaA and US biotech Biogen, which is currently constructing a new facility in the country.

A preda­tor's world? Top an­a­lyst sees the 'haves' and the 'haven't­s' di­verge as biotech bub­bles form — and col­lapse

Josh Schimmer

We’ve all seen the deluge of cash that’s been pouring into biotech from every angle: VCs, IPOs and follow-ons have generated billions in capital for new and emerging drug developers with ready access to some powerful new tech. But Evercore ISI’s Josh Schimmer is asking where we’re headed from here.

His answer is neither apocalyptic nor universally blissful, but if he’s right — and this is a discussion we’re hearing much, much more about at a time of growing economic and industry uncertainty — we may well be at a crossroads that could affect valuations, M&A and the entire global industry that has formed over the past 5 years.

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Pfizer, South San Francisco — Jeff Rumans for Endpoints News

UP­DAT­ED: Pfiz­er takes aim at a flag­ship fran­chise at Sanofi and Re­gen­eron — and scores a few di­rect hits

Count Pfizer in as a top player in the blockbuster game of JAK1 inhibitors.

Over the weekend the pharma giant posted some stellar Phase III efficacy data for their heavyweight contender abrocitinib in atopic dermatitis (eczema) that lines up ahead of a booming Dupixent (dupilumab), a blockbuster in the portfolios of Regeneron and Sanofi. And they put some real distance ahead of Eli Lilly’s trailing Olumiant, which made a delayed initial arrival on the market for rheumatoid arthritis after the FDA hobbled it with some additional hurdles on safety concerns.

JADE-MONO-1 scores well for Pfizer, teeing up what will be an intensely followed breakdown of the JADE MONO-2 data, which the pharma giant recently top-lined as “similar” to the first Phase III when tested against a placebo — a control group that has been easily outclassed by all the drugs in this market niche.

As of now, Pfizer looks to be equipped to run into the review stage — advantaged by a breakthrough therapy designation that is intended to speed up the regulatory process.

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Neil Kumar, Endpoints

Bridge­Bio drops bid to re­claim Ei­dos af­ter di­rec­tors spurn 3 of­fers

A couple of months ago a newly public BridgeBio turned some heads by disclosing that it had made a bid for subsidiary Eidos Therapeutics in hopes of gobbling up the 34% stake that it doesn’t already own. Two offers later, the parties are calling it off.

A special committee of independent directors at the smaller biotech led by RA Capital’s Rajeev Shah and ex-Portola CEO William Lis first rejected the parent company’s initial offer — which would swap 1.3 BridgeBio shares for each Eidos share — on September 12. In the latest announcement, BridgeBio revealed that it eventually raised the offer to 1.5 shares and made $110 million available for all-cash or mixed consideration options, but Eidos still wasn’t interested.

Mark Foley, Revance

HR vi­o­la­tion push­es Re­vance co-founder out, vault­ing for­mer Zel­tiq chief to the helm

Months after Revance amended the terms of its Botox biosimilar collaboration with Mylan, the Newark, California-based drug developer disclosed its co-founder Dan Browne is stepping down, in what appears to be mysterious circumstances.

The company — which is also developing a rival to Allergan’s formidable Botox franchise — on Monday said Browne is departing “due to misjudgment in handling an employee matter,” that has also culminated in his resignation from Revance’s board of directors.

In-house FDA re­view flags a sus­pi­cious im­bal­ance in deaths as Sh­iono­gi hunts an OK for an­tibi­ot­ic

Shionogi has some big questions to answer if they plan to win an FDA panel’s backing for their new antibiotic.

While investigators have provided positive efficacy data for their new product to treat cases of complex urinary tract infections, an FDA review has flagged an imbalance of deaths between the antibiotic and a control arm. And they want the agency’s outside advisers to take a good hard look at that when they meet on Wednesday.

Cell ther­a­py start­up rais­es $16 mil­lion to fund its quest for the Holy Grail in re­gen­er­a­tive med­i­cine

In 2006, Shinya Yamanaka shook stem cell research with his discovery that mature cells can be converted into stem cells, relieving a longstanding political-ethical blockage and throwing open medical research on everything from curbing eye degeneration to organ printing.

But that process still has pitfalls, including in risk and scalability, and some researchers are exploring another way first hinted at years ago: new technology to convert mature cells directly into other mature cells without the complex and time-consuming process of first making them into stem cells.

Eye­ing $86M, Galera leads a pack of three mod­est biotech IPOs push­ing past high pro­file stum­bles

Exactly one year after kicking off a pivotal Phase III study for its lead drug — a companion for cancer patients receiving radiotherapy — Galera is looking to the Nasdaq for some new cash to complete the clinical work and fuel its commercial drive.

CEO Mel Sorensen has penciled in an $86 million ask, which was filed on the same day as liver disease company 89bio and rare disease diagnostics shop Centogene. The trio marks the first batch of IPO filings in the wake of two highly anticipated but ultimately disappointing public debuts by BioNTech and Vir, signaling dwindling biotech fervor on Wall Street. 89bio and Centogene are seeking $70 million and $69 million, respectively.