Takeda weighs Shire bid that would vault it into top drugmaker ranks

LONDON • Takeda Pharmaceutical Co is considering its biggest takeover ever — a bid for Shire plc that could approach US$50 billion (RM192.94 billion) and propel the Japanese company into the ranks of the world’s top drugmakers.

A combination would boost Takeda’s position in drugs for gastrointestinal diseases, cancer and nervous-system ailments, adding key treatments that are in the late stages of testing, according to a statement yesterday. Shire, based in Lexington, Massachusetts, and listed in London, gained as much as 26%.

Takeda is ramping up its takeover ambitions under CEO Christophe Weber, who’s seeking growth overseas as patent expirations and a shrinking domestic population limit opportunities at home. The Osaka-based company did not explain how it would pay for a company whose US$46 billion market value tops Takeda’s US$42 billion.

“Takeda is just desperate to beef up its pipeline, and they’ve been doing small bits of acquisitions on the biotech side,” said Fumiyoshi Sakai, a Tokyo-based analyst at Credit Suisse Securities. “But how they are going to finance US$40-some billion? That’s another one.”

Takeda’s announcement comes amid a flurry of transactions in the pharmaceutical sector, marked by GlaxoSmithKline plc’s US$13 billion agreement to buy out Novartis AG’s stake in their consumer-health joint venture earlier this week. Pfizer Inc and Merck KGaA are seeking buyers for their over-the-counter units, and Sanofi has announced more than US$16 billion worth of acquisitions this year.

The Osaka-based company said its consideration is at a “preliminary and exploratory stage” and it has not formally approached Shire’s board. Takeda must announce its intentions by April 25 under UK takeover rules, and said there’s no certainty it will bid.

Takeda, Japan’s biggest drugmaker, still has the scope for acquisitions after the US$4.7 billion purchase of US biotech Ariad Pharmaceuticals Inc last year, Weber said in a November interview. He said then that the firm is mainly focused on forming more research partnerships and moving its pipeline products into later stages of development to help drive growth.

Shire would give Takeda a broader portfolio in the US as well as an entree to the hemophilia market, which fits Weber’s stated goal of expanding in more expensive drugs targeted to small patient

groups. The combined company’s trailing 12-month revenue would be US$31 billion, which would place it ninth among drugmakers worldwide, according to data compiled by Bloomberg.

Shire CEO Flemming Ornskov has moved to put the company on a new course, partly by focusing on treatments for rare diseases that can command high prices.

The drugmaker has turned from predator to prey in recent years as its shares have slumped since its takeover of Baxalta Inc.

The stock lost 21% this year before yesterday’s announcement. An attempted US$52 billion takeover by AbbVie Inc was terminated in 2014.

A deal for Shire would surpass Takeda’s 2011 acquisition of Nycomed for US$13.7 billion including debt, according to data compiled by Bloomberg. Japanese companies have announced US$26.5 billion of overseas acquisitions this year, up from US$17.8 billion in the same period a year earlier, the data show.

Takeda made a slew of deals in 2018. It announced an offer to acquire TiGenix NV, a Belgian maker of stem-cell therapies, for €520 million (RM2.49 billion) in January, as well as a US$150 million initial payment to Denali Therapeutics Inc for a partnership to develop drugs for neurodegenerative diseases.

In February, Takeda promised another US$230 million to Wave Life Sciences for a pact on treatments for disorders of the central nervous system.

Shire said earlier this year that it was considering spinning off its neuroscience business, which makes drugs for attention deficit and other conditions, into two separate units.

Takeda had ¥440.3 billion (RM16.2 billion) in cash, cash equivalents and short-term investments as of Dec 31, according to data compiled by Bloomberg. — Bloomberg