Shire to Sell Oncology Unit for $2.4 Billion to Servier

Shire to Sell Oncology Unit for $2.4 Billion to Servier

Shire Plc (LON:SHP) has agreed to sell off its oncology division to French pharma group Servier for US$2.4bn, raising doubts over the likelihood of a bid from Japanese drugmaker Takeda.

But the move also means Shire becomes less attractive to Takeda, which has until 25 April to formally announce a takeover bid under United Kingdom stock market rules, after expressing an interest earlier this month. One analyst said that the unit was considered to be non-core for Shire.

In addition, Takeda Pharmaceutical Co Ltd is still now in the process of considering approaching Shire with an offer to acquire the group, after Nikkei reported earlier in April that Takeda could value Shire at USD55 billion. A Takeda spokesman declined to comment. The drugs industry has seen a surge in dealmaking this year as large players look for promising assets to improve their pipelines, but a Takeda-Shire transaction would be by far the biggest yet.

At the end of last week, a report from Reuters citing two sources with direct knowledge of the matter claimed Takeda has even gone so far as sounding out potential lenders to help fund the deal.

Shire chief executive Flemming Ornskov said the sale of the oncology business to Servier demonstrated the value embedded in Shire as shares in the company rose 0.5 per cent as markets opened.

Shire gained as much as 3.5 percent to 3,732 pence in early trading in London.

Jefferies analysts said the sale "should boost Shire's negotiating position on asking price in the current offer period with Takeda". Ironically, Shire itself relocated its corporate headquarters to Ireland for tax reasons.

Last year, Shire's revenues doubled following the takeover to 3.57 billion USA dollars (£2.52 billion), the bulk of which came from the Baxalta business.

The Dublin-based company said the deal covers its already-marketed drug Oncaspar (pergaspargase) for acute lymphoblastic leukaemia (ALL), as well as ex-US rights to pancreatic cancer therapy Onivyde (irinotecan pegylated liposomal formulation) and long-acting Oncaspar follow-up calaspargase pegol - under FDA review for ALL.

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