Takeda Pharmaceuticals is all set to rewrite history! The deal, is touted to be one of the biggest Japanese take-over of a western rival. Rare diseases drug giant Shire recently rejected the third bid a $61 billion cash-and-stock acquisition offer made by Japan’s Takeda Pharmaceuticals. Takeda is in no mood of giving up and has sweetened its proposal making a fourth bid recently, a little over the third bids offer at $62bn. A successful mega-deal will generate a global pharmaceutical powerhouse with $30 bn in annual sales. The deal will position Takeda among the ranks of top 10 global pharmaceutical companies, replenish its drying pipelines with promising drug candidates, boost its position in the United States and make it a leader in the fields of oncology, gastrointestinal diseases and neuroscience.
Takeda has made three offers to buy Shire since March 28, when the company said it was eyeing a takeover of the Irish-based firm, which has most of its operations in Lexington. So far, Takeda has made three unsuccessful offers to Shire. Its first was for about $58 billion and its third was for about $61 billion. But Shire rejected all three. As per laws Takeda has until April 25 to make a definitive bid or walk away empty handed.
The latest proposal is 7 percent above Takeda’s first offer and 58 percent above London-listed Shire’s share price prior to any takeover speculation, the Japanese firm said. Shire’s board said in a statement that it rejected the third offer unanimously because it "continues to significantly undervalue the company and Shire’s growth prospects and pipeline." The board added that it was considering the fourth offer and "will issue a further announcement in due course."
Why is Shire so important for Takeda?
Shire’s pipeline was the clear draw for Takeda. The Irish drugmaker focuses on developing and selling medicines that treat rare diseases and cancers. Its main markets are in the United States, China and Japan. Though headquartered in Ireland, most of its employees are in the United States. Shire markets over 40 products and that raked up $14.4 billion in 2017, up 8% from 2016. In longer term, Shire believes its sales could reach between $17 billion and $18 billion in 2020. The company recently sold its oncology unit to unlisted French drugmaker Servier for $2.4 billion.
Shire is a global leader orphan drug development and commercialization. Its recent $32 billion acquisition of Baxalta has further expanded its position as a leader in rare diseases. That deal landed Shire with Baxalta's top-selling hemophilia product lineup; as a result, Shire's hematology drug sales were $3.8 billion in 2017.
As per The Motley Fool, a global leading investments analyst firm, Shire has well-established immunology and neurosciences businesses that generate billions of dollars in annual revenue. Last year, immunology contributed $4.4 billion to sales, and neurosciences, which includes top-selling ADHD medications such as Vyvanse, added $2.7 billion to the top line. Products for internal medicine, including gastrointestinal drugs, added $1.7 billion to revenue last year, too.
The acquisition will add to Takeda’s rare-disease drug portfolio that often face little competition and command premium prices. Last year, Shire's rare-disease drug sales were $1.4 billion, thanks to demand for its enzyme-replacement drugs Elaprase, Replagal, and Vpriv.
Takeda has only two new drugs with blockbuster potential in late-stage clinical trials: a vaccine for dengue fever and a therapy for Crohn’s disease. Shire’s late-stage pipeline contains more than a dozen treatments for rare diseases.
Takeda’s aims to go global
With a market value of over $41bn Takeda has been actively seeking for growth in overseas markets to transform the company into a global player. Currently, the 233 year old company, has sales in nearly 70 countries. Under the leadership of its first non-Japanese CEO Mr Christophe Weber, Takeda has made some strategic acquisitions and finalized some big deals including the latest acqui...
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