Published: Mon, April 16, 2018
Finance | By Claude Patterson

Shire selling oncology unit to France's Servier for $2.4bn

Shire selling oncology unit to France's Servier for $2.4bn

The deal comes after Takeda expressed interest for a complete takeover, wooed analysts for support and reportedly sought loans to fund the effort - and just days ahead of the April 25 deadline for the Japanese drugmaker to make a bid.

Shire Plc agreed to sell its cancer unit to France's Servier SAS for $2.4 billion, tightening the US -based drugmaker's focus on rare diseases and potentially making it more attractive to Takeda Pharmaceutical Co. as it considers a bid.

But Monday's news that Shire has sold off its cancer treatment unit - which includes its ONCASPAR (leukaemia) and ONIVYDE (pancreas) treatments - has thrown that possible takeover into doubt.

The divestment of the cancer business may be a deterrent for Takeda, since oncology was one of the areas it had highlighted as driving the case for a Shire deal, along with gastrointestinal medicine and neuroscience. A pursuit of Shire would be one of the biggest attempts by a Japanese company to buy a Western rival.

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.

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 by 0835 GMT.

"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".

A Takeda spokesman declined to comment.

The proceeds from the transaction, which is expected to close in this or next quarter, would "increase optionality". In 2017, the oncology business generated $262 million in revenue. The process identified multiple potential strategic buyers across the U.S., Europe and Japan, Shire said.

For privately held Servier, acquiring Shire's oncology operation allows it to establish a direct commercial presence in the United States and boosts its presence in cancer.

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