Shire offloads oncology unit to Servier for $2.4bn

Shire offloads oncology unit to Servier for $2.4bn

The deal comes as Japan's largest drug company, Takeda Pharmaceutical, weighs a potential takeover of Shire.

"We will continue to evaluate our portfolio for opportunities to unlock further value and sharpen our focus on rare disease leadership with selective disposals of non-strategic assets".

The oncology unit was an area that Takeda had identified as a driver for its potential takeover approach.

Takeda said in March it is considering making an acquisition bid for Shire.

Under UK acquisition laws, Takeda has until April 25 to announce an official bid.

Ornskov said the board will consider returning the proceeds of the sale back to shareholders through a buyback programme.

Don't expect the sale of the oncology business to spark a cash infusion into Shire's R&D.

Buying Shire would be transformational for Takeda but would be a huge financial stretch, since the company is worth around $10 billion more than the Japanese group. The market value of Shire is about $47 billion.

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Servier would shell out 9.2 times 2017 revenues for Shire's oncology business.

In a prepared statement, Shire CEO Flemming Ornskov said that though the cancer business-which includes two marketed drugs-was profitable, the company concluded it is not core to Shire's long-term strategy.

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.

"I$3 t is hard for us to believe that selling 2% of Shire's revenues - whether it was strategic to Takeda or not - would alter a contemplated transaction/approach by Takeda of this magnitude".

Servier bolstered its oncology business last year by boosting its cancer-related share of R&D activity over the past two years from 14% to 37% today, with plans to reach 50% within the next two years.

"The acquisition of Shire's oncology franchise enables Servier to meet its strategic ambitions to become a global key player in oncology", stated Olivier Laureau, Servier Group president.

Servier believes that the acquisition will help the firm to establish direct commercial presence in the U.S., in addition to expanding its oncology pipeline and portfolio of in-market drugs. "We thoroughly look forward to welcoming Shire's oncology teams who will join Servier after the closing".

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