Japanese firm eyes up Shire
SHARES in FTSE 100 drugmaker Shire soared 430p to 3500p after it emerged as a £35billion takeover target for Japan’s biggest pharma company.
Takeda Pharmaceutical is considering an approach to Shire as it looks to strengthen its core therapeutic areas of oncology and neuroscience.
Shire, known for its Adderall attention deficit hyperactivity treatment but with a focus on rare diseases, was a target for US drugs group AbbVie four years ago.
But AbbVie walked away after the Obama administration introduced rules clamping down on overseas acquisitions that would lower a company’s tax rate.
Shire, led by chief executive Flemming Ornskov, acquired rival Baxalta for $32billion and another US firm, rare disease specialist Dyax for $5.9billion.
Takeda said an offer for Shire is at “a preliminary and exploratory state”. No approach had been made to the Shire board and there could be no certainty that any approach would lead to a deal.
It said: “Takeda believes that a potential transaction with Shire presents an opportunity to build on its current strong momentum and create a truly global, value-based Japanese biopharmaceutical leader.” Combining with Shire would speed up its vision to be a leader in specialised medicines, enhance its research and development and its late-stage pipeline, it added. Shire said it had not had an approach from Takeda, which must announce whether to make a firm bid by April 25. Nicholas Hyett, equity analyst at investment firm Hargreaves Lansdown, said: “Following Shire’s acquisition of Baxalta in 2016, the group has strong positions in several attractive markets. “Sales of recently developed drugs are rising rapidly and major patent expiries aren’t scheduled until the 2020s. “Meanwhile the labs are looking productive, which should secure revenue streams for the future. “However, the group’s valuation doesn’t reflect those strengths, and there a couple of reasons for that. “First is a balance sheet that’s still weighed down with $19billion of debt following the Baxalta deal that will soak up cash for years to come. Second is the looming threat of competition in the all-important haematology business which now accounts for $3.8billion of annual sales.”