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

Inside FDA HQ (File photo)

The FDA just ap­proved the third Duchenne MD drug. And reg­u­la­tors still don’t know if any of them work

Last year Sarepta hit center stage with the FDA’s controversial reversal of its CRL for the company’s second Duchenne muscular dystrophy drug — after the biotech was ambushed by agency insiders ready to reject a second pitch based on the same disease biomarker used for the first approval for eteplirsen, without actual data on the efficacy of the drug.

On Wednesday the FDA approved the third Duchenne MD drug, based on the same biomarker. And regulators were ready to act yet again despite the lack of efficacy data.

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Cell and Gene Con­tract Man­u­fac­tur­ers Must Em­brace Dig­i­ti­za­tion

The Cell and Gene Industry is growing at a staggering 30% CAGR and is estimated to reach $14B by 20251. A number of cell, gene and stem cell therapy sponsors currently have novel drug substances and products and many rely on Contract Development Manufacturing Organizations (CDMO) to produce them with adherence to stringent regulatory cGMP conditions. Cell and gene manufacturing for both autologous (one to one) and allogenic (one to many) treatments face difficult issues such as: a complex supply chain, variability on patient and cellular level, cell expansion count and a tight scheduling of lot disposition process. This complexity affects quality, compliance and accountability in the entire vein-to-vein process for critically ill patients.

Franz-Werner Haas, CureVac CEO

UP­DAT­ED: On the heels of a snap $1B raise, Cure­Vac out­lines plans to seek emer­gency OK for their Covid-19 vac­cine in a mat­ter of months

CureVac jumped onto Nasdaq Thursday night, landing with an extra $213 million after pricing a batch of shares at $16 a pop. Add in an extra $118 million share purchase by founder Dietmar Hopp — who owns a controlling interest — and another $640 million from deals and the German biotech has raised a cool billion dollars in the space of just 3 weeks.

The company’s stock $CVAC will now start trading this morning, with analysts eager to find out whether the go-go atmosphere on Wall Street will swell the biotech’s share price.

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As the world Terns: Liv­er dis­ease biotech makes ex­ec­u­tive changes; Sanofi vet Kather­ine Bowdish named CEO of PIC Ther­a­peu­tics

→ The C-suite has shuffled considerably at liver disease-focused Terns Pharmaceuticals out of Foster City, CA. Senthil Sundaram now assumes the CEO post, replacing Weidong Zhong, who was at the helm since Terns was founded and is now moving into two new roles: CSO and chairman of the board. Sundaram makes his way to Terns after 2 years as CFO of Nightstar Therapeutics, which would later be acquired by Biogen. He was also VP and head of business development at NASH player Intercept after 13 years in investment banking.

Martin Shkreli (Shutterstock)

Mar­tin Shkre­li con­tin­ued to or­ches­trate an­ti-com­pet­i­tive schemes for Dara­prim be­hind bars — FTC

Martin Shkreli didn’t just blog, read up on drug development news and run his biotech business with a contraband cell phone in prison. According to the FTC, he was also coordinating the anticompetitive scheme to shield Daraprim — the drug at the center of a price-gouging controversy that earned him the “Pharma Bro” nickname — from generic rivals.

Back in January the FTC, together with New York’s attorney general, launched a federal lawsuit against Shkreli, who’s now serving a 7-year sentence for defrauding investors in his hedge fund, alleging that he effectively created a drug monopoly. While Shkreli’s notorious move to raise the per tablet price of Daraprim from $17.50 to $750 was perfectly legal, the tactics he allegedly deployed to box out competitors weren’t.

Cal­lid­i­tas bets up to $102M on a biotech buy­out, snag­ging a once-failed PBC drug

After spending years developing its oral formulation of the corticosteroid budesonide, Sweden’s Calliditas now has its sights set on the primary biliary cholangitis field.

The company will buy out France-based Genkyotex, and it’s willing to bet up to €87 million ($102 million) that Genkyotex’s failed Phase II drug, GKT831, will do better in late-stage trials.

Under the current agreement, Calliditas $CALT will initially pay €20.3 million in cash for 62.7% of Genkyotex (or €2.80 a piece for 7,236,515 shares) in early October, then circle back for the rest of Genkyotex’s shares under the same terms. If nothing changes, the whole buyout will cost Calliditas €32.3 million, plus up to  €55 million in contingent rights.

Qi­a­gen in­vestors spurn Ther­mo Fish­er’s takeover of­fer, de­rail­ing a $12B+ deal

Thermo Fisher Scientific had announced an $11.5 billion takeover of Dutch diagnostics company Qiagen back in March, but the deal apparently did not sit well with Qiagen investors.

After getting hammered by critics who contended that Qiagen $QGEN was worth a lot more than what Thermo Fisher wanted to spend, investors turned thumbs down on the offer — derailing the buyout even after Thermo Fisher increased its offer to $12.6 billion in July. Qiagen’s share price has been boosted considerably by Covid-19 as demand for its testing kits surged.

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NIH director Francis Collins at a Senate Appropriations subcommittee hearing for Operation Warp Speed (Graeme Jennings/Pool via AP Images)

Covid-19 roundup: 'No­vem­ber or De­cem­ber' Collins' best bet on a vac­cine OK; First plas­ma tri­al sug­gests mor­tal­i­ty re­duc­tion

Count NIH director Francis Collins out for any wager that the FDA would authorize a Covid-19 vaccine in October.

The discussion came up during a call with reporters because some states and local governments have been told by the CDC to have vaccination plans ready to go by Oct. 1. Pharma execs, most notably from Pfizer and BioNTech, have raised hopes about a licensure during that month; President Donald Trump last week sounded an optimistic note about having a vaccine on the market “right around” Election Day on Nov. 3 — or possibly before.

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Charlie Silver (Mission Bio)

'We want to be every­where.' Mis­sion Bio rais­es $70M be­hind re­sis­tance-hunt­ing se­quenc­ing plat­form

Charlie Silver wants to look really, really closely at a lot of your cells. And he just got a lot of money to do so.

Silver’s startup, Mission Bio, raised $70 million in a Series C round Thursday led by Novo Holdings. The money, which brings Mission Bio to $120 million raised since its 2012 founding, will be used to advance the single-cell sequencing platform they built to detect early response or resistance to new cancer therapies.