Sector News

Reuters: Shire prepares to make new bid for Baxalta – source

November 25, 2015
Life sciences

Drugmaker Shire is preparing to make a new takeover offer for U.S. biotech firm Baxalta that if successful will create one of the world’s leading specialists in rare diseases, a source with direct knowledge of the situation said on Tuesday.

The London-listed group has asked its advisers to renew its bid effort, the source said, almost four months after Baxalta rejected an unsolicited $30 billion offer that it said significantly undervalued the company.

Shire’s bid preparations come three weeks after it announced its $5.9 billion purchase of U.S. rare disease specialist Dyax Corp.

Shire is working with Morgan Stanley (MS.N), Evercore (EVR.N) and Deutsche Bank (DBKGn.DE) on the offer which could be structured in cash and shares, the source said, cautioning that no deal was certain and negotiations could still fall through. A spokesman at Shire declined to comment while Baxalta had no immediate comment. Morgan Stanley, Evercore and Deutsche Bank declined to comment.

Baxalta, which has a market capitalisation of $22.7 billion, would help complement Shire’s growing portfolio of high-priced treatments for rare or “orphan” diseases.

Baxalta’s shares rose to an intra-day high of $37.50, up more than 10 percent, after the Reuters report, before trimming gains to $35.67 at 2105 GMT(1605 ET). On Aug. 3 Shire valued each Baxalta share at $45.23.

If it goes ahead, the deal will create a rare diseases company with product sales of around $20 billion by 2020 and double-digit percent annual sales growth.

Shire Chief Executive Flemming Ornskov has relentlessly pursued a merger with Baxalta for the past six months, the source said.

“He’s never given up,” the source said, adding that Shire is keen to buy Baxalta to deliver on its goal of doubling its revenue in the next few years.On Nov. 2 Ornskov said the acquisition of Dyax had not compromised Shire’s ability to pursue a bid for Baxalta.

“Even with this transaction, we will continue to have the financial firepower to pursue other value-added strategic acquisitions, including Baxalta,” he said at the time.

Baxalta, advised by Goldman Sachs, said Shire’s bid did not reflect its potential as a newly listed company which expects its shares to rise as it becomes better known. The biotech firm was spun off by Baxter International (BAX.N) in July.

Baxalta develops biotech treatments for rare blood conditions, cancers and immune system disorders. It employs 16,000 people and had proforma revenue of $6 billion in 2014.

The transaction, however, faces several hurdles mainly due to Baxalta’s state-of-the-art takeover defences, with a “poison pill” that effectively stops unwanted suitors buying more than 10 percent of the company and a hard-to-replace board.

By Joshua Franklin and Pamela Barbaglia

comments closed

Related News

January 29, 2023

Colorcon, Inc. signs Put agreement with intent to acquire controlled atmosphere packaging specialist Airnov Healthcare Packaging

Life sciences

Airnov provides critical healthcare industries with high-quality, controlled atmosphere packaging, to protect their products from moisture and oxygen. The business has manufacturing facilities in the USA, France, China and India and employs around 700 people.

January 29, 2023

Takeda pledges up to $1.13B for rights to Hutchmed’s cancer drug fruquintinib outside of China

Life sciences

Takeda of Japan has partnered with Hong Kong-based Hutchmed, gaining the commercial rights to colorectal cancer drug fruquintinib outside of China for $400 million up front, plus $730 million in potential milestone payments. Takeda also will help develop fruquintinib, which can be applied to subtypes of refractory metastatic colorectal cancer, regardless of biomarker status, the companies said.

January 29, 2023

Vir taps Bayer dealmaker Marianne De Backer as its next CEO

Life sciences

On April 3, Scangos, who’s been chief executive officer at Vir since the start of 2017, will hand over the reins to Marianne De Backer, Ph.D. De Backer comes over from Bayer, where she currently heads up pharmaceutical strategy, business development and licensing. Alongside her CEO appointment, De Backer is set to join Vir’s board of directors, the company said Wednesday.

How can we help you?

We're easy to reach